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CUTTING DHS DUPLICATION AND WASTEFUL 

SPENDING: IMPLEMENTING PRIVATE-SECTOR 

BEST PRACTICES AND WATCHDOG RECOMMENDATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

AND MANAGEMENT EFFICIENCY 

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 26, 2013 

Serial No. 113–14 

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpo.gov/fdsys/ 
(II) 

COMMITTEE ON HOMELAND SECURITY 

MICHAEL T. MCCAUL, Texas, Chairman 

LAMAR SMITH, Texas 

PETER T. KING, New York 

MIKE ROGERS, Alabama 

PAUL C. BROUN, Georgia 

CANDICE S. MILLER, Michigan, Vice Chair 

PATRICK MEEHAN, Pennsylvania 

JEFF DUNCAN, South Carolina 

TOM MARINO, Pennsylvania 

JASON CHAFFETZ, Utah 

STEVEN M. PALAZZO, Mississippi 

LOU BARLETTA, Pennsylvania 

CHRIS STEWART, Utah 

RICHARD HUDSON, North Carolina 

STEVE DAINES, Montana 

SUSAN W. BROOKS, Indiana 

SCOTT PERRY, Pennsylvania 

VACANCY

BENNIE G. THOMPSON, Mississippi 

LORETTA SANCHEZ, California 

SHEILA JACKSON LEE, Texas 

YVETTE D. CLARKE, New York 

BRIAN HIGGINS, New York 

CEDRIC L. RICHMOND, Louisiana 

WILLIAM R. KEATING, Massachusetts 

RON BARBER, Arizona 

DONDALD M. PAYNE, JR., New Jersey 

BETO O’ROURKE, Texas 

TULSI GABBARD, Hawaii 

FILEMON VELA, Texas 

STEVEN A. HORSFORD, Nevada 

ERIC SWALWELL, California 

GREG HILL, Chief of Staff 

MICHAEL GEFFROY, Deputy Chief of Staff/Chief Counsel 

MICHAEL S. TWINCHEK, Chief Clerk 

I. LANIER AVANT, Minority Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY 

JEFF DUNCAN, South Carolina, Chairman 

PAUL C. BROUN, Georgia 

RICHARD HUDSON, North Carolina 

STEVE DAINES, Montana 

VACANCY

MICHAEL T. MCCAUL, Texas (Ex Officio) 

RON BARBER, Arizona 

DONALD M. PAYNE, JR., New Jersey 

BETO O’ROURKE, Texas 

BENNIE G. THOMPSON, Mississippi (Ex Officio) 

RYAN CONSAUL, Subcommittee Staff Director 

DEBORAH JORDAN, Subcommittee Clerk 

TAMLA SCOTT, Minority Subcommittee Staff Director 
(III) 

C O N T E N T S 

Page 

STATEMENTS

The Honorable Jeff Duncan, a Representative in Congress From the State 

of South Carolina, and Chairman, Subcommittee on Oversight and Management Efficiency ..................................................................................................... 1 

The Honorable Ron Barber, a Representative in Congress From the State 

of Arizona, and Ranking Member, Subcommittee on Oversight and Management Efficiency ..................................................................................................... 3 

The Honorable Bennie G. Thompson, a Representative in Congress From 

the State of Mississippi, and Ranking Member, Committee on Homeland 

Security: 

Oral Statement ..................................................................................................... 5 

Prepared Statement ............................................................................................. 6 

WITNESSES

Ms. Cathleen A. Berrick, Managing Director, Homeland Security and Justice 

Issues, Government Accountability Office: 

Oral Statement ..................................................................................................... 9 

Prepared Statement ............................................................................................. 11 

Ms. Anne L. Richards, Assistant Inspector General for Audits, Office of Inspector General, U.S. Department of Homeland Security: 

Oral Statement ..................................................................................................... 28 

Prepared Statement ............................................................................................. 30 

Mr. Paul G. Stern, Ph.D., Member, Board of Directors, Business Executives 

for National Security: 

Oral Statement ..................................................................................................... 35 

Prepared Statement ............................................................................................. 37 

Mr. Craig Killough, Vice President, Organization Markets, Project Management Institute: 

Oral Statement ..................................................................................................... 40 

Prepared Statement ............................................................................................. 41 

Mr. Henry H. Willis, Ph.D., Director, Rand Homeland Security and Defense 

Center: 

Oral Statement ..................................................................................................... 46 

Prepared Statement ............................................................................................. 48 

APPENDIX

Questions From Chairman Jeff Duncan for Cathleen A. Berrick ........................ 71 

Questions From Chairman Jeff Duncan for Anne L. Richards ............................ 73 

Questions From Chairman Jeff Duncan for Paul G. Stern .................................. 75 

Questions From Chairman Jeff Duncan for Craig Killough ................................ 75 

(1) 

CUTTING DHS DUPLICATION AND WASTEFUL 

SPENDING: IMPLEMENTING PRIVATE-SECTOR BEST PRACTICES AND WATCHDOG 

RECOMMENDATIONS 

Friday, April 26, 2013 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT

EFFICIENCY, 

COMMITTEE ON HOMELAND SECURITY, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:05 a.m., in Room 

311, Cannon House Office Building, Hon. Jeff Duncan [Chairman 

of the subcommittee] presiding. 

Present: Representatives Duncan, Daines, Barber, Payne, and 

Thompson. 

Mr. DUNCAN. Committee on Homeland Security, Subcommittee 

on Oversight Management Efficiency will come to order. 

The purpose of this hearing is to examine the areas of duplication at the Department of Homeland Security, identify opportunities for cost savings, and highlight ways the Department can improve its efficiency. Now I recognize myself for an opening statement. 

We meet today to examine an issue of great importance to the 

American people; duplication and wasteful spending. While our Nation is facing $16 trillion of debt, American families are continuing 

to see larger portions of their hard-earned paychecks taken out in 

Federal taxes. 

I believe that the Federal Government must do more to eliminate 

duplicative and wasteful programs, so I recently introduced legislation establishing the Committee on the Elimination of Nonessential 

Federal Programs. Its sole responsibility is to root out wasteful 

spending. As the third-largest Federal agency with a $60 billion budget, the 

Department of Homeland Security has an important responsibility 

to the American people for how it uses their hard-earned money. 

Yet, when my constituents see unnecessary duplication of mission or programs that expend valuable resources, a reluctance to 

learn from best practices within the Federal Government or private 

sector, or an unwillingness to make changes identified in audits as 

ways to improve, it can be very frustrating. 

Congressional watchdogs have issued thousands of reports with 

ways to improve the efficiency of DHS and save taxpayer dollars. 

Earlier this month, the GAO issued a key report related to duplica-
2 

tion and cost-savings opportunities across the Federal Government, 

which found 162 areas within the Federal Government with fragmented, overlapping, or duplicative spending. 

Within DHS, this report identified six separate DHS components 

involved in research and development activities. It also found 35 

instances among 29 out of 50 R&D contracts where overlap in activities occurred. The price tag for these duplicative contracts was 

$66 million. 

Even more concerning, GAO found that DHS does not have the 

policies or mechanisms necessary to coordinate or track R&D activities across the Department. DHS was created after 9/11 to help 

prevent the stovepiping of information. 

If DHS does not have a system in place for basic R&D, how does 

that lack of communication affect components, operational abilities, 

and DHS’ ability to meet its mission successfully to defend the 

homeland? 

In 2012, GAO identified five more duplicative programs in DHS 

and four opportunities to save costs. In 2011, GAO identified four 

homeland security issues where DHS could eliminate duplication 

and five areas for potential cost savings. Yet, out of all these ways 

to improve efficiency, DHS has only fully addressed recommendations in two of these areas. 

Likewise, the Inspector General has open and unimplemented recommendations identifying over $600 million in questionable 

costs and about $50 million in funds that could be put to better 

use. 

As of last month, the IG had issued 210 recommendations that 

if implemented could result in cost savings of $1.2 billion. The IG 

has also identified 10 high-priority recommendations, which would 

reduce waste and inefficiency at DHS. 

To date, DHS has closed three of these high-priority recommendations. However, only one of these recommendations has 

been implemented. DHS must take action to implement these recommendations in a timely manner to improve the efficiency and effectiveness of the Department. 

Further, while I understand that DHS components have different 

missions, I believe there may be some overlap in the type of assets 

and resources used by these components. U.S. Customs and Border 

Protection, CBP, currently has two distinct operational boating law 

enforcement units; those under CBP’s Office of Air and Marine, 

OAM, and Border Patrol agents with maritime qualifications. 

Also, CBP and the Coast Guard each have their own air and marine assets. Now Coast Guard is part of the overall Department of 

Homeland Security. So out of more than 1,000 Coast Guard small 

boats and 250 CBP boats, only one common asset is shared between them; the 33-foot safe boat. CBP and the Coast Guard 

should consider consolidating these similar resources to use taxpayer dollars more wisely. 

DHS has pointed to its Efficiency Review, Bottom-Up Review, 

and success in public-private partnerships for showing progress in 

these areas. However, I believe DHS can do more starting with 

learning from the best practices of the private industry. 

While not every private-sector principle is transferrable to the 

Federal Government and although incentives may be different, 
3 

there are many core principles that both companies and the Federal Government require for success. 

As a small businessman in South Carolina, I found the same 

principles of strategic vision combined with strong and capable 

leadership and smart budgeting to be critical. You don’t spend 

more than you take in or you go bankrupt. Yet the Federal Government has been slow to learn. 

In systems management, process management, and organizational culture, the Federal Government, and DHS in particular, 

have a lot to learn. I believe that DHS components should better 

reach out to the private-sector companies with similar processes. 

For example, TSA’s challenges with long lines and safe and satisfied customers are not unique to the TSA. Six Flags, Disney World 

also face similar challenges. DHS should be thinking about what 

ways its components can better leverage best practices from the 

private sector in order to minimize duplication and wasteful spending and instead improve outcomes. 

In conclusion, the issues highlighted by GAO and the Inspector 

General require action from DHS; not words, but action. The private sector possesses many tools that can help DHS implement 

these recommendations, and I believe that DHS should carefully 

consider how it can improve in order to steward American tax dollars more efficiently and effectively. 

I look forward to hearing more from our witnesses today. I appreciate them coming and testifying before us. The Chairman will now 

recognize the Ranking Minority Member of the subcommittee, the 

gentleman from Arizona, Mr. Barber, for any statement he may 

have. 

Mr. BARBER. Well, thank you, Mr. Chairman and thank you for 

convening this important hearing. Thank you to the witnesses for 

being with us today. I look forward to your testimony and the opportunity to raise questions with you. 

I am really pleased to see that for the third year now the GAO, 

as required by law, has taken a very hard look at Federal Government programs and provided us with a road map for improving efficiency, eliminating waste and duplication in saving taxpayer dollars. 

This year’s report, as you know, identifies 31 areas that require 

greater efforts at efficiency as well as suggestions for providing 

more effective Government services. Three of these 31 areas relate 

to the Department of Homeland Security. 

The report also identifies Government duplication, overlap, and 

fragmentation to help Congress discover more cost savings and revenue enhancement opportunities. 

The need to reduce spending and examine Federal programs to 

determine where reductions can be made is critical to our efforts 

to keep the country and move it further along the road to economic 

recovery. We must get our budget financial house in order and this 

is one important area where we can do that. 

Last week, along with 18, 19 other Members of Congress, I introduced bipartisan legislation to require Congress to address waste 

and duplication in Federal programs across the board. 
4 

This legislation would require Congressional committees to hold 

hearings to scrutinize duplicative programs and take actions on 

these findings before it makes its appropriations recommendations. 

That is what we are here to do today. To talk about these important findings from the GAO report and how we can act on a bipartisan basis to find common-sense cost savings at DHS. 

This is not a conversation that we can enter into lightly. We 

must ensure that the steps we take to cut costs do not compromise 

the homeland security. 

The threats our Nation faces, both man-made and natural, are 

unfortunate and all-too-present reality. As we know, on April 15, 

2013, the terrorist attack on the Boston Marathon reminds us that 

terrorism remains a very real threat to our Nation and to the security of the homeland, and homeland security professionals must be 

fully equipped to counter this threat and preserve our security. 

Two days after the Boston attack, a fertilizer plant explosion in 

West, Texas claimed the lives of 15 individuals—the memorial 

services were held yesterday—and countless others were injured. 

The Federal Emergency Management Agency, FEMA, and the 

National Protection and Programs Directorate of the Office of Infrastructure Protection are just two of the Department’s components that have been involved in analyzing and responding to that 

tragic event. 

These combined tragedies show us that while duplicative efforts 

must be identified and eliminated, we must also continue to ensure 

that our homeland security officials have the resources they need 

to keep our Nation safe. 

Moreover, border security remains a critical National issue. 

While we have made some progress in our efforts to secure the border on the southern part of our country, there is so much yet left 

to be done to ensure that my constituents in particular who work 

and live along the Southwest Border are safe in their homes and 

on their land. 

Yes, we have made improvements, but we still have 50 percent 

of drugs being seized in my district alone. We cannot allow this to 

continue, and we cannot afford to lose ground in our border secure 

mission where some progress has been made. 

That is why we must ensure that the Border Patrol operates at 

full capacity and that our agents are given the resources they must 

have to do their jobs effectively. 

Last month, as a result of sequestration, the Department was required to slash every new program—every program, project, and 

activity by 5 percent. These, in my view, were irresponsible cuts 

that we simply cannot afford. We must cut the budget, we must reduce the deficit, but there are more prudent ways to do it than the 

sequestration. 

The sequester’s impact on our Border Patrol agents along the 

Southwestern Border is very real. It is also real for the customs inspectors who are helping move legitimate trade into our country 

and expedite legal passage. 

The overtime cuts and work furloughs that have had a cumulative impact that is slashing our Border Patrol agents’ pay by as 

much as 40 percent if fully implemented. That means losing the 

work-hour equivalent of 5,000 agents Nation-wide. 
5 

Cutting pay means agents would spend less time monitoring our 

borders, leaving us vulnerable both to terrorism and to cartel activity and this is absolutely unacceptable. 

That is why spending across the Department must be properly 

scrutinized to avoid harmful cuts to Border Patrol agents and the 

Customs inspectors and we must of course ensure that the allocation of funds is done effectively. 

The Department unfortunately has not yet put metrics into place 

to measure and evaluate efforts to secure the Southwest Border. 

How can we know what to cut and what programs deserve increased funding if we don’t know what is working? When the safety 

of Americans, and my constituents in particular, is on the line, I 

refuse to simply guess at what resources make sense. 

I think we can all agree that we have a lot of work to do, and 

I look forward to the hearing from the witnesses on how the Department can improve its effectiveness and efficiency, can eliminate 

duplication, and put its resources to the best use possible. 

Thank you, Mr. Chairman, I yield back. 

Mr. DUNCAN. Thank you, Mr. Barber. 

The Chairman will now recognize the Ranking Member of the 

full committee, the gentleman from Mississippi, Mr. Thompson, for 

a statement. 

Mr. THOMPSON. Thank you, Chairman Duncan, for holding this 

hearing. 

I welcome our witnesses also. 

Given the current fiscal climate, every level of government, Federal, State, and local, has joined the effort to eliminate wasteful 

spending, weed out unnecessary duplication, and cut costs where 

possible. 

Eliminating duplicative programs is a common-sense approach to 

saving scarce Federal funds. This approach however should be implemented with an eye toward ensuring that reducing programs 

and activities does not diminish homeland security capabilities. 

Given the broad range of the Department of Homeland Security’s 

mission including aviation, rail, border security, emergency preparedness, cybersecurity, critical infrastructure protection, and 

counterterrorism, there may be in fact a need for built-in redundancy through such a far-reaching industry. 

As a result, any effort to reduce duplication and downsizing the 

programs must not result in leaving the United States vulnerable. 

Yet, there is clearly a need to tighten the belt. 

In many instances, the Department has done just that. Since 

2009, through its efficiency review and component initiatives, the 

Department has identified more than $4 billion in cost avoidances 

and its fiscal year 2014 efficiency initiatives are expected to result 

in an additional $1.3 billion in savings. 

To aid to the effort to reduce spending, the Government Accountability Office has conducted its annual examination of duplication, 

overlap, and fragmentation across Federal Government programs 

and has released its third report in this series including recommendations for improvement. 

In this report, GAO identifies 31 areas where agencies may be 

able to achieve greater efficiency or effectiveness. Within those 31 

areas, GAO also identified 81 actions that the Executive branch or 
6 

Congress should take to reduce fragmentation, overlap, or duplication as well as other cost savings or revenue enhancement opportunities. 

Due to its size, mission, and inherent overlapping authority, the 

Department of Homeland Security is named in more areas of overlap than any other agency. The report contained two areas where 

fragmentation, overlap, and duplication exists at the Department; 

No. 1, research and development, and No. 2, field-based information sharing. 

GAO also identified checked baggage screening as an area that 

presented an opportunity for cost savings and revenue enhancement. Hopefully the Department would heed GAO’s recommendations. 

I look forward to hearing from GAO on the Department’s response. I must note however that while GAO makes recommendations in its report for agency action, it also makes recommendations 

for Congress. 

Unfortunately, following the last two GAO reports on reducing 

duplication, the Executive branch addressed far more of its recommendations than the steps taken by Congress to fix situations 

that could only be addressed through legislative action. 

I look forward, Mr. Chairman, to working with you and drafting 

some bipartisan legislation that perhaps could fix some of those obvious overlaps and duplication. 

Also, I would be remiss if I did not address at least one effort 

to reduce the Departmental duplication that is once again before 

Congress seeking approval. This is the Department’s proposal to 

consolidate its 16 individually authorized preparedness grant programs into a single pool of money. 

This ill-conceived proposal causes me grave concern. It was voted 

down last Congress and I urge my colleagues to do the same this 

year. Stakeholders, first responders, and State and local representatives have all spoken against this proposal and stated that such 

a consolidation would result in hamstrung first responders facing 

unprecedented natural and man-made disasters. 

As the world watched, first responders who were on the scene at 

the Boston Marathon made the difference between lives being 

saved and a higher death toll. 

Moreover, in the subsequent search and capture of the surviving 

perpetrator, local law enforcement, equipped with infrared technology and other homeland security apparatus that are often purchased with Homeland Security grant funds, brought a swift end 

to what could have been a protracted nightmare for Boston area 

residents. 

So I look forward to today’s testimony, and I thank the witnesses 

are for appearing today. 

I yield back my time, Mr. Chairman. 

[The statement of Ranking Member Thompson follows:] 

STATEMENT OF RANKING MEMBER BENNIE G. THOMPSON

APRIL 26, 2013 

Given the current fiscal climate, every level of Government—Federal, State, and 

local—has joined the effort to eliminate wasteful spending, weed out unnecessary 

duplication, and cut costs where possible. 
7 

Eliminating duplicative programs is a common-sense approach to saving scarce 

Federal funds. 

This approach, however, should be implemented with an eye toward ensuring that 

reducing programs and activities does not diminish homeland security capabilities. 

Given the broad range of the Department of Homeland Security’s mission—including aviation, rail, border security, emergency preparedness, cybersecurity, critical 

infrastructure protection, and counterterrorism—there may in fact be a need for 

built-in redundancy throughout such a far-reaching agency. 

As a result, any effort to reduce duplication and downsize programs must not result in leaving the United States vulnerable. 

Yet, there is clearly a need to tighten the belt. 

In many instances, the Department has done just that. 

Since 2009, through its Efficiency Review and component initiatives, the Department has identified more than $4 billion in cost avoidances and its fiscal year 2014 

efficiency initiatives are expected to result in an additional $1.3 billion in savings. 

To aid in the effort to reduce spending, the Government Accountability Office 

(GAO) has conducted its annual examination of duplication, overlap, and fragmentation across Federal Government programs and has released its third report in this 

series, including recommendations for improvement. 

In its report, GAO identifies 31 areas where agencies may be able to achieve 

greater efficiency or effectiveness. 

Within those 31 areas, GAO also identified 81 actions that the Executive branch 

or Congress could take to reduce fragmentation, overlap, or duplication, as well as 

other cost savings or revenue enhancement opportunities. 

Due to its size, mission, and inherent overlapping authority, the Department of 

Homeland Security is named in more areas of overlap than any other agency. 

The report contained two areas where fragmentation, overlap, and duplication exists at the Department: (1) Research and Development; and (2) Field-Based Information Sharing. 

GAO also identified Checked Baggage Screening as an area that presented an opportunity for cost savings and revenue enhancement. 

Hopefully, the Department will heed GAO’s recommendations. I look forward to 

hearing from GAO on the Department’s response. 

I must note, however, that while GAO makes recommendations in its report for 

agency action, it also makes recommendations for Congress. 

Unfortunately, following the last two GAO reports on reducing duplication, the 

Executive branch addressed far more of its recommendations than the steps taken 

by Congress to fix situations that could only be addressed through legislative action. 

In fact, in a follow-up status report on the 176 recommended actions made in the 

first two reports, GAO determined that nearly 80 percent of the issues identified 

that required Executive branch action had been addressed. 

On the other hand, Congress had addressed less than 40 percent of the GAO recommendations that required Congressional action. 

I would urge the Majority to live up to its stated goal to reduce spending by not 

merely providing lip service but working in a bipartisan manner to bring commonsense, cost-savings bills on actions recommended by GAO to the House floor. 

I would be remiss if I did not address at least one effort to reduce Departmental 

duplication that is once again before Congress seeking approval. 

That is the Department’s proposal to consolidate its 16 individually-authorized 

preparedness grant programs into a single pool of money. 

This ill-conceived proposal causes me grave concern. 

It was voted down last Congress and I urge my colleagues to do the same this 

year. 

Stakeholders, first responders, and State and local representatives have all spoken against this proposal and stated that such a consolidation could result in hamstrung first responders facing unprecedented natural and man-made disasters. 

As the world watched, first responders who were on the scene at the Boston Marathon made the difference between lives being saved and a higher death toll. 

Moreover, in the subsequent search and capture of the surviving perpetrator, local 

law enforcement, equipped with infra-red technology and other homeland security 

apparatus—that are often purchased with homeland security grand funds—brought 

a swift end to what could have been a protracted nightmare for Boston-area residents. 

Mr. DUNCAN. Thank the Ranking Member for participating today 

and other Members of the subcommittee are reminded that opening 

statements may be submitted for the record. 
8 

We are pleased to have a very distinguished panel of witnesses 

before us today on this topic, and I will begin by introducing the 

witnesses and then I will recognize each one for their testimony. 

Our first witness today is Ms. Cathleen Berrick and she is the 

managing director of homeland security and justice issues at the 

Government Accountability Office or GAO. 

In this position, she oversees GAO’s reviews of the Department 

of Homeland Security and Department of Justice Programs and 

Operations. Prior to being named managing director by Comptroller General Gene Dodaro, she oversaw GAO’s reviews of aviation and surface transportation’s security matters as well as Department of Homeland Security management issues. Prior to joining GAO, Ms. Berrick held numerous positions at the Department 

of Defense and the U.S. Postal Service. 

Our second witness is Ms. Ann Richards who is the assistant inspector general for the Office of Audits within the Department of 

Homeland Security’s Office of Inspector General, OIG. 

Prior to joining OIG in 2007, Ms. Richards served in the Department of the Interior including as the assistant inspector general for 

audits. Ms. Richards also held a number of positions with the U.S. 

Army Audit Agency and Mrs. Richards is a CPA in the Commonwealth of Virginia. 

Dr. Paul Stern is the chairman of Claris Capital, LLC, and is a 

member of the Board of Directors of Business Executives for National Security. Business Executives for National Security is nonpartisan and nonprofit group that supports U.S. Government by 

applying best business practices solutions to National security 

problems. 

Dr. Stern has over 26 years of experience in active operating experience and 7 years of private-equity experience. Dr. Stern also 

serves on the board of directors of Whirlpool Corporation, Dow 

Chemical Company, and four of Thayer III’s portfolio companies. 

Mr. Craig Killough is the vice president of Organization Markets 

at the Project Management Institute, PMI. He is responsible for 

PMI’s government and corporate relations and regional development. 

Previously he served as director of practitioner products responsible for the development and delivery of PMI professional and career development programs, products, and services. 

Prior to joining PMI, Mr. Killough was a consultant in Simulation and Training Technologies. Mr. Killough was the executive 

vice president for global operations with General Physics Corporation and vice president for Systems Engineering and Licensing 

with Sigma Energy Services. 

Dr. Henry Willis is the director of the RAND Homeland Security 

and Defense Center and a professor at the Pardee RAND graduate 

school. Dr. Willis has applied risk analysis tools to resource allocation and risk-management decisions into areas of public health and 

emergency preparedness, homeland and National security policy, 

energy and environmental policy, and transportation planning. 

Dr. Willis’ recent research has involved assessing the cost and 

benefits of terrorism security measures like the Western Hemisphere Travel Initiative and evaluating the impact of public health 
9 

emergency preparedness grant programs like the Cities Readiness 

Initiative. 

I want to thank all of the panelists for being here today and I 

look forward to your testimony. 

The Chairman will now recognize Ms. Berrick to testify. 

STATEMENT OF CATHLEEN A. BERRICK, MANAGING DIRECTOR, HOMELAND SECURITY AND JUSTICE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. BERRICK. Good morning, Chairman Duncan, Ranking Member Barber, and Ranking Member Thompson and Members of the 

subcommittee. 

I am pleased to be here today to discuss GAO’s work assessing 

fragmentation, overlap, and duplication across the Department of 

Homeland Security as well as DHS’s efforts to strengthen their 

management functions. 

When DHS was first created back in 2003, GAO recognized that 

it was a significant undertaking creating and integrating a department as large and complex as DHS that would take years to 

achieve. 

Since that time, we have issued over 1,300 reports assessing different aspects of DHS’s programs and operations and made over 

1,800 recommendations to address issues we identified in that 

work of which 60 percent DHS has implemented. 

My testimony today is based on two reports GAO issued earlier 

this year. One mentioned this morning, was our third annual report assessing overlap, duplication, and fragmentation across the 

Federal Government. The second report I will discuss is GAO’s biannual high-risk update in which strengthening DHS management 

functions was designated a high-risk area. 

Since 2011, we have identified 24 areas of fragmentation, overlap, and duplication across the Department as well as opportunities 

to achieve cost savings and enhance revenue. Taken together, this 

could result in billions of dollars of savings if implemented by the 

Department. 

For example, increasing the aviation security passenger fee collections could increase revenue by $2 billion to $10 billion over 5 

years over current collections. 

In addition, adjusting the indicator on which FEMA principally 

relies related to major disaster declarations could result in significant savings. This indicator was developed in 1986. It hasn’t been 

adjusted for inflation every year. It also hasn’t been adjusted to reflect changes and increases in personal income on which the indicator is based. 

In the past 12 years there has been about $80 billion that has 

been paid out in Federal disaster declarations. Had that indicator 

been adjusted for inflation, about 25 percent of those declarations 

likely wouldn’t have been approved. Had it been adjusted for increases in per capita personal income another 44 percent may not 

have been approved. 

Another example, installing in-line baggage screening systems 

could result in net savings of up to $470 million over 5 years due 

to decreased personnel costs as installing these systems requires 

less TSOs to operate equipment. 
10 

Further, improving collaboration among field-based informationsharing entities, and there are about 268 of these entities across 

the United States, could help reduce overlap, duplication, and fragmentation. We looked at eight urban areas that have 37 of these 

entities and we found that 34 of the 37 overlapped with the functions of another entity. 

In addition to identifying new areas we also assess the Department’s progress in implementing the recommendations we made in 

the last two annual duplication reports, and some five of those recommendations have been addressed, 24 are in progress, and 13 

have not been addressed. Some of those recommendations, as was 

mentioned, were made to the Department, some to the Congress. 

One area not addressed relates to FEMA grants. We reported 

that DHS needs to collect better project-level information so that 

they have visibility over where their grants are being awarded. 

We identified numerous opportunities for potential duplication 

and a number of a grant programs. We looked at four of the largest 

grant programs at DHS, which accounted for about $20 billion in 

grants awarded from 2002 to 2011 and identified overlap and fragmentation among those programs. 

Regarding GAO’s designation of strengthening DHS management 

functions as high-risk, we first designated this area as high-risk 

back in 2003 because of the enormity of the effort of creating the 

Department of Homeland Security. 

Since that time, DHS has made significant progress in integrating its component agencies to make a functioning department, 

but the one area that we think significant work remains is the 

management of the Department. 

I will give you some examples—by management I am referring 

to acquisition management, IT management, financial management, human capital management. Related to IT, DHS developed 

an IT governance structure to provide oversight over its IT investment portfolio, which was very positive and consistent with best 

practices; however, that structure only covers about 20 percent of 

DHS’s IT investments so they need to do more work to have oversight over those. 

In addition, we reported that DHS leadership continues to invest 

in major acquisition programs that lack key foundational documents that are really essential to managing acquisitions. 

Just to give you an example, we have looked at 71 major acquisition programs and we found that 42 of those programs exceeded 

cost and schedule estimates. Sixteen of those 42 exceeded cost estimates by about $32 billion over a 3-year period. 

While DHS has made important progress in these areas more 

work remains related to this high-risk area, and specifically we 

identified 31 actions and outcomes of which DHS agreed with, that 

we believe are important to addressing these management issues. 

Of the 31, 7 have been fully or mostly addressed, 16 are in 

progress, and 7 have just been initiated. 

We have on-going work assessing all of these issues and would 

be happy to report on DHS’s progress moving forward. 

Mr. Chairman, this concludes my statement. I would be happy 

to respond to questions. 

[The prepared statement of Ms. Berrick follows:] 
11 

PREPARED STATEMENT OF CATHLEEN A. BERRICK

APRIL 26, 2013 

GAO HIGHLIGHTS

Highlights of GAO–13–547T, a testimony before the Subcommittee on Oversight 

and Management Efficiency, Committee on Homeland Security, House of Representatives. 

Why GAO Did This Study 

Since beginning operations in 2003, DHS has become the third-largest Federal department, with more than 224,000 employees and an annual budget of about $60 

billion. Over the past 10 years, DHS has implemented key homeland security operations and achieved important goals to create and strengthen a foundation to reach 

its potential. Since 2003, GAO has issued more than 1,300 reports and Congressional testimonies designed to strengthen DHS’s program management, performance 

measurement efforts, and management processes, among other things. GAO has reported that overlap and fragmentation among Government programs, including 

those of DHS, can cause potential duplication, and reducing it could save billions 

of tax dollars annually and help agencies provide more efficient and effective services. Moreover, in 2003, GAO designated implementing and transforming DHS as 

high-risk because it had to transform 22 agencies into one department, and failure 

to address associated risks could have serious consequences. This statement addresses: (1) Opportunities for DHS to reduce fragmentation, overlap, and duplication 

in its programs; save tax dollars; and enhance revenue, and (2) opportunities for 

DHS to strengthen its management functions. 

What GAO Recommends 

While this testimony contains no new recommendations, GAO previously made 

about 1,800 recommendations to DHS designed to strengthen its programs and operations. The Department has implemented more than 60 percent of them and has 

actions under way to address others. 

DEPARTMENT OF HOMELAND SECURITY.—OPPORTUNITIES EXIST TO STRENGTHEN EFFICIENCY AND EFFECTIVENESS, ACHIEVE COST SAVINGS, AND IMPROVE MANAGEMENT

FUNCTIONS

What GAO Found 

Since 2011, GAO has identified 11 areas across the Department of Homeland Security (DHS) where fragmentation, overlap, or potential duplication exists and 13 

areas of opportunity for cost savings or enhanced revenue collections. In these reports, GAO has suggested 53 total actions to the Department and Congress to help 

strengthen the efficiency and effectiveness of DHS operations. In GAO’s 2013 annual report on Federal programs, agencies, offices, and initiatives that have duplicative goals or activities, GAO identified 6 new areas where DHS could take actions 

to address fragmentation, overlap, or potential duplication or achieve significant cost 

savings. For example, GAO found that DHS does not have a Department-wide policy 

defining research and development (R&D) or guidance directing components how to 

report R&D activities. Thus, DHS does not know its total annual investment in 

R&D, which limits its ability to oversee components’ R&D efforts. In particular, 

GAO identified at least 6 components with R&D activities and an additional $255 

million in R&D obligations in fiscal year 2011 by DHS components that was not centrally tracked. GAO suggested that DHS develop and implement policies and guidance for defining and overseeing R&D at the Department. In addition, GAO reported that by reviewing the appropriateness of the Federal cost share the Transportation Security Administration (TSA) applies to agreements financing airport facility modification projects related to the installation of checked baggage screening 

systems, TSA could, if a reduced cost share was deemed appropriate, achieve cost 

efficiencies of up to $300 million by 2030 and be positioned to install a greater number of optimal baggage screening systems. GAO has also updated its assessments 

of the progress that DHS and Congress have made in addressing the suggested actions from the 2011 and 2012 annual reports. As of March 2013, of the 42 actions 

from these reports, 5 have been addressed (12 percent), 24 have been partially addressed (57 percent), and the remaining 13 have not been addressed (31 percent). 

Although DHS and Congress have made some progress in addressing the issues that 

GAO has previously identified, additional steps are needed to address the remaining 

areas to achieve associated benefits. 
12 

1Fragmentation refers to those circumstances in which more than one Federal agency (or 

more than one organization within an agency) is involved in the same broad area of National 

need and opportunities exist to improve service delivery. Overlap occurs when multiple agencies 

or programs have similar goals, engage in similar activities or strategies to achieve them, or 

target similar beneficiaries. Duplication occurs when two or more agencies or programs are engaged in the same activities or provide the same services to the same beneficiaries. 2Pub. L. No. 111–139, § 21, 124 Stat. 8, 29–30 (2010), 31 U.S.C. § 712 note. 3GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO–11–318SP (Washington, DC: Mar. 1, 2011); 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and 

Enhance Revenue, GAO–12–342SP (Washington, DC: Feb. 28, 2012); and 2013 Annual Report: 

Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial 

Benefits, GAO–13–279SP (Washington, DC: Apr. 9, 2013). 4GAO, High-Risk Series: An Update, GAO–13–283 (Washington, DC: February 2013). 

While challenges remain across its missions, DHS has made considerable progress 

since 2003 in transforming its original component agencies into a single department. 

As a result, in its 2013 biennial high-risk update, GAO narrowed the scope of the 

area and changed its focus and name from Implementing and Transforming the Department of Homeland Security to Strengthening the Department of Homeland Security Management Functions. To more fully address this area, DHS needs to further 

strengthen its acquisition, information technology, and financial and human capital 

management functions. Of the 31 actions and outcomes GAO identified as important 

to addressing this area, DHS has fully or mostly addressed 8, partially addressed 

16, and initiated 7. Moving forward, DHS needs to, for example, validate required 

acquisition documents in a timely manner, and demonstrate measurable progress in 

meeting cost, schedule, and performance metrics for its major acquisition programs. 

In addition, DHS has begun to implement a governance structure to improve information technology management consistent with best practices, but the structure 

covers less than 20 percent of DHS’s major information technology investments. 

Chairman Duncan, Ranking Member Barber, and Members of the subcommittee: 

I am pleased to be here today to discuss our work on opportunities for the Department of Homeland Security (DHS) to eliminate fragmentation, overlap, and duplication in its programs; enhance revenue; and improve management functions at the 

Department.1 Since beginning operations in 2003, DHS has become the third-largest 

Federal department, with more than 224,000 employees and an annual budget of 

about $60 billion. Over the past 10 years, DHS has implemented key homeland security operations and achieved important goals to create and strengthen a foundation to reach its potential. Since 2003, we have made approximately 1,800 recommendations to DHS across more than 1,300 reports and Congressional testimonies designed to strengthen program management, performance-measurement efforts, and management processes, and enhance coordination and information sharing, among other things. DHS has implemented more than 60 percent of these recommendations and has actions under way to address others. However, the Department has more to do to ensure that it conducts its missions efficiently and effectively while simultaneously preparing to address future challenges that face the Department and the Nation. 

On April 9, 2013, we issued our third report in response to the statutory requirement that we identify and report annually on Federal programs, agencies, offices, 

and initiatives that have duplicative goals or activities.2 Since 2011, we have identified 162 areas across the Federal Government where Congress or Executive branch 

agencies, including DHS, could take action to reduce fragmentation, overlap, and 

duplication or achieve cost savings to address the rapidly building fiscal pressures 

facing our Nation.3 We reported that fragmentation among Government programs 

or activities can be a harbinger of potential overlap or duplication. Reducing or 

eliminating fragmentation, overlap, or duplication could potentially save billions of 

tax dollars annually and help agencies provide more efficient and effective services. 

Moreover, in February 2013, we reported on DHS’s efforts to address the highrisk area of Strengthening the Department of Homeland Security Management 

Functions.4 We first designated this area as high-risk in 2003 because DHS had to 

consolidate 22 agencies—several with major management challenges—into one Department. Further, failure to effectively address DHS’s management and mission 

risks could have serious consequences for U.S. National and economic security. 

My statement today is based on these reports and addresses: (1) Opportunities for 

DHS to reduce fragmentation, overlap, and duplication in its programs; save tax dollars; and enhance revenue, and (2) opportunities for DHS to strengthen its management functions. For these past reports, among other things, we analyzed DHS documents, reviewed and updated our past reports issued since DHS began its operations in March 2003, and, interviewed DHS officials. More detailed information on 
13 

5 In many cases, the existence of fragmentation, overlap, or duplication can be difficult to determine precisely because of a lack of data on programs and activities. Where information was 

not available that would have provided conclusive evidence of fragmentation, overlap, or duplication, we often refer to potential unnecessary duplication. 6GAO–13–279SP. 

7 An area may comprise a single or multiple suggested actions. We evaluated the progress of 

those areas identified in our March 2011 and February 2012 reports by determining an ‘‘overall 

assessment’’ rating for each area based on the individual rating of each action with the area. 

For Congressional actions, we applied the following criteria: ‘‘Addressed’’ means relevant legislation has been enacted; ‘‘partially addressed’’ means a relevant bill has passed a committee, the 

House of Representatives, or the Senate, or relevant legislation only addressed part of the action 

needed; and ‘‘not addressed’’ means a bill may have been introduced but did not pass out of a 

committee, or no relevant legislation has been introduced. For Executive branch actions, ‘‘addressed’’ means implementation of the action needed has been completed; ‘‘partially addressed’’ 

means a response to the action needed is in development, but not yet completed; and ‘‘not addressed’’ means that minimal or no progress has been made toward implementing the action 

needed. 

the scope and methodology of our previous work can be found within each specific 

report. We conducted this work in accordance with generally accepted Government 

auditing standards. 

DHS CAN STRENGTHEN THE EFFICIENCY AND EFFECTIVENESS OF ITS OPERATIONS AND

ACHIEVE COST SAVINGS BY REDUCING FRAGMENTED, OVERLAPPING, OR POTENTIALLY

DUPLICATIVE ACTIVITIES

Areas of Fragmentation, Overlap, and Potential Duplication at DHS 

Since 2011, we have identified 11 areas across DHS where fragmentation, overlap, 

or potential duplication exists, and suggested 24 actions to the Department and 

Congress to help strengthen the efficiency and effectiveness of DHS operations.5 In 

some cases, there is sufficient information available to show that if actions are 

taken to address individual issues, significant financial benefits may be realized. In 

other cases, precise estimates of the extent of potential unnecessary duplication, and 

the cost savings that can be achieved by eliminating any such duplication, are difficult to specify in advance of Congressional and Executive branch decision making. 

However, given the range of areas we identified at DHS and the magnitude of many 

of the programs, the cost savings associated with addressing these issues could be 

significant. 

In April 2013, we identified 2 new areas where DHS could take actions to address 

fragmentation, overlap, or potential duplication.6 First, we found that DHS does not 

have a Department-wide policy defining research and development (R&D) or guidance directing how components are to report R&D activities. As a result, the Department does not know its total annual investment in R&D, a fact that limits 

DHS’s ability to oversee components’ R&D efforts and align them with agency-wide 

R&D goals and priorities. DHS’s Science and Technology Directorate, Domestic Nuclear Detection Office, and the U.S. Coast Guard—the only DHS components that 

report R&D-related budget authority to the Office of Management and Budget 

(OMB) as part of the budget process—reported $568 million in fiscal year 2011 R&D 

budget authority. However, we identified at least 6 components with R&D activities 

and an additional $255 million in R&D obligations in fiscal year 2011 by other DHS 

components that were not reported to OMB in the budget process. To address this 

issue, we suggested that DHS develop and implement policies and guidance for defining and overseeing R&D at the Department. Second, we reported that the fragmentation of field-based information sharing can be disadvantageous if activities are 

uncoordinated, as well as if opportunities to leverage resources across entities are 

not fully exploited. We suggested that DHS and other relevant agencies develop a 

mechanism that will allow them to hold field-based information-sharing entities accountable for coordinating with each other and monitor and evaluate the coordination results achieved, as well as identify characteristics of entities and assess specific geographic areas in which practices that could enhance coordination and reduce 

unnecessary overlap could be adopted. DHS generally agreed with our suggestions 

and is reported taking steps to address them. Moving forward, we will monitor 

DHS’s progress to address these actions. 

Concurrent with the release of our 2013 annual report, we updated our assessments of the progress that DHS has made in addressing the actions we suggested 

in our 2011 and 2012 annual reports.7 Table 1 outlines the 2011–2012 DHS-related 

areas in which we identified fragmentation, overlap, or potential duplication, and 

highlights DHS’s and Congress’s progress in addressing them. 
14 

8Percentages do not add to 100 percent because of rounding. 

9DHS could not provide us with a reliable estimate of the potential cost savings resulting 

from consolidating these three mechanisms. 

In our March 2011 and February 2012 reports, in particular, we suggested that 

DHS or Congress take 21 actions to address the areas of overlap or potential duplication that we found. Of these 21 actions, 2 (approximately 10 percent) have been 

addressed, 13 (approximately 62 percent) have been partially addressed, and the remaining 6 (approximately 29 percent) have not been addressed.8 For example, to address the potential for overlap among three information-sharing mechanisms that 

DHS funds and uses to communicate security-related information with public transit agencies, in March 2011, we suggested that DHS could identify and implement 

ways to more efficiently share security-related information by assessing the various 

mechanisms available to public transit agencies.9 We assessed this action as partially addressed because TSA has taken steps to streamline information sharing 

with public transit agencies, but the agency continues to maintain various mechanisms to share such information. In March 2011, we also found that TSA’s security 

assessments for hazardous material trucking companies overlapped with efforts conducted by the Department of Transportation’s (DOT) Federal Motor Carrier Safety 

Administration (FMCSA), and as a result, Government resources were not being 

used effectively. After we discussed this overlap with TSA in January 2011, agency 

officials stated that, moving forward, they intend to only conduct reviews on trucking companies that are not covered by FMCSA’s program, an action that, if implemented as intended, we projected could save more than $1 million over the next 5 

years. We also suggested that TSA and FMCSA could share each other’s schedules 

for conducting future security reviews, and avoid scheduling reviews on hazardous 

material trucking companies that have recently received, or are scheduled to receive, a review from the other agency. We assessed this action as addressed because 

in August 2011, TSA reported that it had discontinued conducting security reviews 

on trucking companies that are covered by the FMCSA program. Discontinuing such 
15 

10 As of March 2013, DHS had not taken steps to determine the benefits of participating in 

the interagency forums or identified the costs incurred by all partners participating in each 

forum. 11The President’s fiscal year 2014 budget request proposes consolidating State and local preparedness grant programs (excluding Emergency Management Performance Grants and fire 

grants) into the National Preparedness Grant Program. If approved, and depending on its final 

form and execution, the consolidated National Preparedness Grant Program could help reduce 

redundancies and mitigate the potential for unnecessary duplication. 12 In some cases, there is sufficient information to estimate potential savings or other benefits 

if actions are taken to address individual issues. In other cases, estimates of cost savings or 

other benefits would depend upon what Congressional and Executive branch decisions were 

made, including how certain our recommendations are implemented. See appendix I, table 5, 

for a summary of cost savings and revenue enhancement areas and actions we identified in our 

2011–2013 annual reports that are relevant to DHS. 

reviews should eliminate the short-term overlap between TSA’s and FMCSA’s reviews of hazardous material trucking companies. 

Although the Executive branch and Congress have made some progress in addressing the issues that we have previously identified, additional steps are needed 

to address the remaining areas and achieve associated benefits. For example, to 

eliminate potential duplicating efforts of interagency forums in securing the Northern Border, in March 2011, we reported that DHS should provide guidance to and 

oversight of interagency forums to prevent duplication of efforts and help effectively 

utilize personnel resources to strengthen coordination efforts along the Northern 

Border.10 Further, the four DHS grant programs that we reported on in February 

2012—the State Homeland Security Program, the Urban Areas Security Initiative, 

the Port Security Grant Program, and the Transit Security Grant Program—have 

multiple areas of overlap and can be sources of potential unnecessary duplication. 

These grant programs, which FEMA used to allocate about $20.3 billion to grant 

recipients from fiscal years 2002 through 2011, have similar goals and fund similar 

activities, such as equipment and training, in overlapping jurisdictions. To address 

these areas of overlap, we reported that Congress may want to consider requiring 

DHS to report on the results of its efforts to identify and prevent unnecessary duplication within and across these grant programs, and consider these results when 

making future funding decisions for these programs. Such reporting could help ensure that both Congress and FEMA steer scarce resources to homeland security 

needs in the most efficient, cost-effective way possible.11 See appendix I, table 4, for 

a summary of the fragmentation, overlap, and duplication areas and actions we 

identified in our 2011–2013 annual reports that are relevant to DHS. 

Opportunities for Cost-Saving and Revenue Enhancements at DHS 

Our 2011–2013 annual reports also identified 13 areas where DHS or Congress 

should consider taking 29 actions to reduce the cost of operations or enhance revenue collection for the Department of the Treasury.12 Most recently, in April 2013, 

we identified 4 cost-savings and revenue enhancement areas related to DHS. Table 

2 provides a summary of the 2011–2012 DHS-related areas in which we identified 

opportunities for cost savings or revenue enhancement, as well the status of efforts 

to address these areas. 
16 

TABLE 2.—COST SAVINGS AND REVENUE ENHANCEMENT OPPORTUNITIES 

IDENTIFIED IN OUR 2013 ANNUAL REPORT 

Annual 

Report Areas Identified 1

2013 ........ Agricultural Quarantine Inspection Fees (Area 18).—The United States 

Department of Agriculture’s Animal and Plant Health Inspection 

Service could have achieved as much as $325 million in savings 

(based on fiscal year 2011 data, as reported in GAO’s March 2013 report) by more fully aligning fees with program costs; although the 

savings would be recurring, the amount would depend on the costcollections gap in a given fiscal year and would result in a reduced 

reliance on U.S. Customs and Border Protection’s annual Salaries 

and Expenses appropriations used for agricultural inspection services. 

2013 ........ Checked Baggage Screening (Area 28).—By reviewing the appropriateness of the Federal cost share the Transportation Security Administration applies to agreements financing airport facility modification 

projects related to the installation of checked baggage screening systems, the Transportation Security Administration could, if a reduced 

cost share was deemed appropriate, achieve cost efficiencies of up to 

$300 million by 2030 and be positioned to install a greater number of 

optimal baggage screening systems than it currently anticipates. 

2013 ........ Cloud Computing (Area 29).—Better planning of cloud-based computing 

solutions provides opportunity for potential savings of millions of dollars. 

2013 ........ Information Technology Operations and Maintenance (Area 30).— 

Strengthening oversight of key Federal agencies’ major information 

technology investments in operations and maintenance provides opportunity for savings on billions in information technology investments. 

Source: GAO. 

1The area numbers indicate the number assigned to the area when it was originally reported. 

In addition, in April 2013 we also reported on the steps that DHS and Congress 

have taken to address the cost savings and revenue enhancement areas identified 

in our 2011 and 2012 annual reports. Table 3 provides a summary of the 2011–2012 

DHS-related areas in which we identified opportunities for cost savings or revenue 

enhancement, as well the status of efforts to address these areas. 
17 

13Percentages do not add to 100 percent because of rounding. In assessing progress on the 

areas we identified in our 2011 annual report for this year’s report, we combined two areas related to the Department of Homeland Security’s management of acquisitions (Areas 75 and 76) 

into one area. 

Of the 21 related actions we suggested that DHS or Congress take in our March 

2011 and February 2012 reports to either reduce the cost of Government operations 

or enhance revenue collection, as of March 2013, 3 (about 14 percent) have been addressed, 11 (about 52 percent) have been partially addressed, and 7 (about 33 percent) have not been addressed.13 For example, in February 2012, we reported that 

to increase the likelihood of successful implementation of the Arizona Border Surveillance Technology Plan, minimize performance risks, and help justify program 

funding, the Commissioner of CBP should update the agency’s cost estimate for the 

plan using best practices. This year, we assessed this action as partially addressed 

because CBP initiated action to update its cost estimate, using best practices, for 

the plan by providing revised cost estimates in February and March 2012 for the 

plan’s two largest projects. However, CBP has not independently verified its lifecycle cost estimates for these projects with independent cost estimates and reconciled any differences with each system’s respective life-cycle cost estimate, consistent with best practices. Such action would help CBP better ensure the reliability 

of each system’s cost estimate. Further, in March 2011, we stated that Congress 

may wish to consider limiting program funding pending receipt of an independent 

assessment of TSA’s Screening of Passengers by Observation Techniques (SPOT) 

program. This year, we assessed this action as addressed because Congress froze the 

program funds at the fiscal year 2010 level and funded less than half of TSA’s fiscal 

year 2012 request for full-time behavior detection officers. 

Although DHS and Congress have made some progress in addressing the issues 

that we have previously identified that may produce cost savings or revenue enhancements, additional steps are needed. For example, in February 2012, we reported that FEMA should develop and implement a methodology that provides a 
18 

14 In the President’s fiscal year 2014 budget request, TSA proposes to replace the current ‘‘perenplanement’’ fee structure with a ‘‘per one-way trip’’ fee structure so that passengers pay the 

fee only one time when traveling to their destination. It also removes the current statutory fee 

limit and replaces it with a statutory fee minimum of $5.00 in 2014, with annual incremental 

increases of 50 cents from 2015 to 2019, resulting in a fee of $7.50 per one-way trip in 2019 

and thereafter. According to TSA, the proposed fee would increase collections by an estimated 

$25.9 billion over 10 years. Of this amount, $7.9 billion will be applied to increase offsets to 

the discretionary costs of aviation security and the remaining $18 billion will be treated a mandatory savings and deposited in the general fund for deficit reduction. This proposal presents 

an option that, consistent with our suggested action, Congress may consider in determining 

whether to take legislative action to change the fee. 15GAO’s Action Tracker is a publicly accessible website of the 162 areas and approximately 

380 suggested actions presented in our 2011, 2012, and 2013 reports. GAO’s Action Tracker includes progress updates and assessments of Legislative and Executive branch actions needed. 

We will add areas and suggested actions identified in future reports to GAO’s Action Tracker 

and periodically update the status of all identified areas and activities. 16GAO–13–283. 17GAO, Homeland Security: DHS Requires More Disciplined Investment Management to Help 

Meet Mission Needs, GAO–12–833, (Washington, DC: Sept. 18, 2012). 

more comprehensive assessment of a jurisdiction’s capability to respond to and recover from a disaster without Federal assistance. As of March 2013, FEMA had not 

addressed this action. In addition, in the 2012 report, we suggested that Congress, 

working with the administrator of TSA, may wish to consider increasing the passenger aviation security fee according to one of many options, including but not limited to the President’s Deficit Reduction Plan option ($7.50 per one-way trip by 

2017) or the Congressional Budget Office, President’s Debt Commission, and House 

Budget Committee options ($5 per one-way trip). These options could increase fee 

collections over existing levels from about $2 billion to $10 billion over 5 years. However, as of March 2013, Congress had not passed legislation to increase the passenger security fee.14 For additional information on our assessment of DHS’s and 

Congress’s efforts to address our previously reported actions, see GAO’s Action 

Tracker.15

DHS NEEDS TO STRENGTHEN ITS MANAGEMENT FUNCTIONS

Following its establishment in 2003, DHS focused its efforts primarily on implementing its various missions to meet pressing homeland security needs and threats, 

and less on creating and integrating a fully and effectively functioning Department. 

As the Department matured, it has put into place management policies and processes and made a range of other enhancements to its management functions, which 

include acquisition, information technology, financial, and human capital management. However, DHS has not always effectively executed or integrated these functions. 

The Department has made considerable progress in transforming its original component agencies into a single Cabinet-level Department and positioning itself to 

achieve its full potential; however, challenges remain for DHS to address across its 

range of missions. DHS has also made important strides in strengthening the Department’s management functions and in integrating those functions across the Department. As a result, in February 2013, we narrowed the scope of the high-risk 

area and changed the focus and name from Implementing and Transforming the Department of Homeland Security to Strengthening the Department of Homeland Security Management Functions.16 Of the 31 actions and outcomes GAO identified as important to addressing this area, DHS has fully or mostly addressed 8, partially addressed 16, and initiated 7. Moving forward, continued progress is needed in order 

to mitigate the risks that management weaknesses pose to mission accomplishment 

and the efficient and effective use of the Department’s resources. For example: 

• Acquisition management.—Although DHS has made progress in strengthening 

its acquisition function, most of DHS’s major acquisition programs continue to 

cost more than expected, take longer to deploy than planned, or deliver less capability than promised. We identified 42 programs that experienced cost growth, 

schedule slips, or both, with 16 of the programs’ costs increasing from a total 

of $19.7 billion in 2008 to $52.2 billion in 2011—an aggregate increase of 166 

percent. We reported in September 2012 that DHS leadership has authorized 

and continued to invest in major acquisition programs even though the vast majority of those programs lack foundational documents demonstrating the knowledge needed to help manage risks and measure performance.17 We recommended that DHS modify acquisition policy to better reflect key program and 

portfolio management practices and ensure acquisition programs fully comply 

with DHS acquisition policy. DHS concurred with our recommendations and re-
19 

18GAO, Information Technology: DHS Needs to Further Define and Implement Its New Governance Process, GAO–12–818 (Washington, DC: July 25, 2012). 19GAO, DHS Strategic Workforce Planning: Oversight of Department-wide Efforts Should Be 

Strengthened, GAO–13–65 (Washington, DC: Dec. 3, 2012). 20GAO, Department of Homeland Security: Taking Further Action to Better Determine Causes 

of Morale Problems Would Assist in Targeting Action Plans, GAO–12–940 (Washington, DC: 

Sept. 28, 2012). 

ported taking actions to address some of them. Moving forward, DHS needs to, 

for example, validate required acquisition documents in a timely manner, and 

demonstrate measurable progress in meeting cost, schedule, and performance 

metrics for its major acquisition programs. 

• Information technology management.—DHS has defined and begun to implement a vision for a tiered governance structure intended to improve information 

technology (IT) program and portfolio management, which is generally consistent with best practices. However, the governance structure covers less than 

20 percent (about 16 of 80) of DHS’s major IT investments and 3 of its 13 portfolios, and the Department has not yet finalized the policies and procedures associated with this structure. In July 2012, we recommended that DHS finalize 

the policies and procedures and continue to implement the structure. DHS 

agreed with these recommendations and estimated it would address them by 

September 2013.18

• Financial management.—DHS has, among other things, received a qualified 

audit opinion on its fiscal year 2012 financial statements for the first time since 

the Department’s creation. DHS is working to resolve the audit qualification to 

obtain an unqualified opinion for fiscal year 2013. However, DHS components 

are currently in the early planning stages of their financial systems modernization efforts, and until these efforts are complete, their current systems will continue to inadequately support effective financial management, in part because 

of their lack of substantial compliance with key Federal financial management 

requirements. Without sound controls and systems, DHS faces challenges in obtaining and sustaining audit opinions on its financial statement and internal 

controls over financial reporting, as well as ensuring its financial management 

systems generate reliable, useful, and timely information for day-to-day decision 

making. 

• Human capital management.—In December 2012, we identified several factors 

that have hampered DHS’s strategic workforce planning efforts and recommended, among other things, that DHS identify and document additional 

performance measures to assess workforce planning efforts.19 DHS agreed with 

these recommendations and stated that it plans to take actions to address them. 

In addition, DHS has made efforts to improve employee morale, such as taking 

actions to determine the root causes of morale problems. Despite these efforts, 

however, Federal surveys have consistently found that DHS employees are less 

satisfied with their jobs than the Government-wide average. In September 2012, 

we recommended, among other things, that DHS improve its root cause analysis 

efforts of morale issues. DHS agreed with these recommendations and noted actions it plans to take to address them.20

In conclusion, given DHS’s significant leadership responsibilities in securing the 

homeland, it is critical that the Department’s programs and activities are operating 

as efficiently and effectively as possible; that they are sustainable; and that they 

continue to mature, evolve, and adapt to address pressing security needs. Since it 

began operations in 2003, DHS has implemented key homeland security operations 

and achieved important goals and milestones in many areas. These accomplishments are especially noteworthy given that the Department has had to work to 

transform itself into a fully functioning Cabinet department while implementing its 

missions. However, our work has shown that DHS can take actions to reduce fragmentation, overlap, and unnecessary duplication to improve the efficiency of its operations and achieve cost savings in several areas. Further, DHS has taken steps 

to strengthen its management functions and integrate them across the Department; 

however, continued progress is needed to mitigate the risks that management weaknesses pose to mission accomplishment and the efficient and effective use of the Department’s resources. DHS has indeed made significant strides in protecting the 

homeland, but has yet to reach its full potential. 

Chairman Duncan, Ranking Member Barber, and Members of the subcommittee, 

this concludes my prepared statement. I would be pleased to respond to any questions that Members of the subcommittee may have. 
20 

21GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, GAO–11–318SP (Washington, DC: Mar. 1, 2011); 2012 Annual 

Report: Opportunities to Reduce Duplication, Overlap, and Fragmentation, Achieve Savings, and 

Enhance Revenue, GAO–12–342SP (Washington, DC: Feb. 28, 2012); and 2013 Annual Report: 

Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial 

Benefits, GAO–13–279SP (Washington, DC: Apr. 9, 2013). 

APPENDIX I.—AREAS AND ACTIONS IDENTIFIED IN 2011–2013 ANNUAL REPORTS RELATED

TO THE DEPARTMENT OF HOMELAND SECURITY

This enclosure presents a summary of the areas and actions we identified in our 

2011–2013 annual reports that are relevant to the Department of Homeland Security (DHS).21 It also includes our assessment of the overall progress made in each 

of the areas and the progress made on each action that we identified in our 2011 

and 2012 annual reports in which Congress and DHS could take actions to reduce 

or eliminate fragmentation, overlap, and potential duplication or achieve other potential financial benefits. As of April 26, 2013, we have not assessed DHS’s progress 

in addressing the relevant 2013 areas. Table 4 presents our assessment of the overall progress made in implementing the actions needed in the areas related to fragmentation, overlap, or duplication. Table 5 presents our assessment of the overall 

progress made in implementing the actions needed in the areas related to cost savings or revenue enhancement. 
21 

Annual,eport Areas idemmed Assessment 

20 11 

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O\'I!' the ne>15 yea", 

~T;:~'"':.""':~~>i~~~~~~~;:'=:;~~~1rU= 0 

Doir>!I 50"""'-"<1 reQUir< coopera:ionfrom FMCSA 

Action 3: TSA oo FMCSA soouk! COOlin"" e"orIs toward the long-term ~ 01 TSA aSSOOlin!l f) lUI '''IIul<ilory responsbilily from FMCSA fOf oorrrnercial trucl<ing secunty, 1herelly re<l00ng 

fragmemation 

SlId,illU 5e<;u'ily R~I ~~ IlIlolllldli,", w ill, Pu Iit; T,,,,,"l Auo<o"'''''' (AI"~ 2~)_ OHS ~ 

S1ffiamh'\e mechanism, IOf sMmg secOOty-relaled ini""""tion wrtl1 J)<JIltic 1r<Insi! ilqeoo..s 10 

help addreM O\'I!ffappillJ information 

Action 1: OHS _ TSA cool<! iOOn1ify and irr(>Iement WOI)'S 10 more emciently sI'oIre secoolyrelaled in!OflI1OItion by assessiog the ,aoous mecn.nisms .vailalole to public 1r<Ir>5i! ilqer>eies----

inclOOin!I DHS's in!onmtion ne_, TSA's ponaloo tI>e net"""", and!he public transil anatfSis center-as lIIeU as tI>e information tl>ey prO'lide, _ iden:tty oppor\l.<l~ 10 streamlne these 

"""""'nisms. TSA otn,i<lis stol1ed in Sep:ember 2010 1h<It TSA appied $2.5 billion Iorl!scat yeo", 

2009 _ 2010 to its portal 00 DHS's information netwo,K primarily 00 """"loping and OfIJanizifl\l 

data lor at! transportat>)[l modes 

Action 2: DHS could """""'P and !Folck ,eriflable cost data specific to each of its inloonation-

~~~~s~~~S~n~a~iden~=~~~OS~~:'~~~:' f) oonsoIiddtion of these mechafliosms _ provide C«>Ortuni':ies roo- the agency to better .uoc.:e its 

in!onruI1ion-sharing rewurces 

FEMA Grltn!. (Area 2<3 ): The Fe<Ier.II Emer'Jl'ncy Man;ogement Agency (FEldA) needs to 

ifr4>ro'" its o~ht ct gl<lnts 000 establish a framelOOfl< lor assessing capalJil ~ to kfootify 

g.aps 000 prioritize in\'eSlments 

Action I : FEldA cook! benefit from examining its gl<lnt PKIII"""S and coordina1ing its oppIi«l1ioo 

process !o eriminate Of reduce redundancy among ~ran! re<tp;en:s and PKIII""" p'''poses 

Action 2: Congress m.y IIIish to coosiOOr lirrltin!l prep';lfed,-,.,,;s ~",m fUr>d0fl\l to main1ainin!l 

exislin\l capabilities (as delermined by FEMA) unlif FEMA completes a national preparedness 

"""",smoot 01 cap;>bi lly \)<IPS ill each Ie,er based on tfere<l, IAIPallil!y-speci!\c performance 

objectives to ooable pronlization 01 gl<lm foodin!l_ In Aprif 201 f , Congress rOOuced fIloofl\l 1or 

FEldA p"ep;lre<Iness g-ants by $815 mllion from the ............ t requesled in tI>e Presidenl's scol 

yea, 20f 1 budtJet In Cecember 2011, Congress reduced fI.n<I"", IOf FEldA preparemess grams 

by $1.28 billion from tm arrJOl.Olt ~led in the Presi<!enfs hcill yea, 2012 bOOoJet 

Action 3: FEldA shaulJ e a ""tional preparedness "","""",,,III oIcapability gaps at each ""f!I ~nn t""""', ,~f"IhiIdy "",,"jnc I"'lInrTn;onc-'! nhi<>_ In ~""No roOOffii7~1inn of gr nt 

fIlOOin!l, _ FEWI cook! identify the poIootial cos1S 100estal:J~ and main1aining those 

capabil ~ at each _ and <letermne whdt co~ federal "'Jeocies soould provide 

Action 4: Once FEIdAMS COfI'(lIeted its assessmem. Congress may ";sh 10 consider i n'i1ifl\l tI>e 

l.OSe 01 federal p"ep;lfe<iness gl<lnt PKIIIl<lms to food ontv projec1S to fill identifte<l, valida:ed, and 

OO<:OOIOO:ed capabilitygaps th:It may (0< may not) inckJ<le main101ining exis~fl\l capabir.ie5 

<levek>pe<l 

o 
22 

Annual repofl Areas identifH><! Assessment 

20f2 ::~e:::::~~':''1~:;:=:~~e==':'''~n''v~~';~,r~Os,",~ to f) 

2012 

2012 

fro,gmented poIK:~ kl dereod !he food ~nd "llricut1ure s)'Stem!! "'Jainst poten:ialte<roris! .n""ks 

and ""'ior dlSasters 

~i~~~:'x~:f!"..: ~,~I= -=~n~~~~~~~~~i: f) to coordirulte a<}OOcie5' O'IernU Home\aod Security Presideotial DOrective 9 (HSPD-9) 

irr(>Iementatioo enorts 

Cybe~ecurtty Human C""ital (Area 12): Go'Ierrrnentwide in rti a~""" toenhanre ~lXily 

"",,",-Ioree in the federal 9O"emment need be:ter S1JlJCNre, planning, guidance, and ooordiniltion 

10 re<luee duplic;ltioo 

Actioo 1: To ensure thOlt I1Ol'efJlffiefltwide C)o ernecurity IroItlorce initiOlti""" a re beller 

coordinated, the O~ectors 01 the Off"", 01 Man"'JOOl!'nt and Budget (OMS ). nd the omre of 

Per500neI M.:if'Ol<}efnefl1 (OPM) and !he Secre:aries 01 Coomeree ond HomeIaoo Security shooId 

coosoIid.te and a li<Jn eftons kl defioo roles, respoosibOlrties, "'lls. and COOlpeteoc",s 10( the 

federnl cyberneclXily ",,",force 

~i::'~~,~~~~:=~~~~~ ~= .t:'';:~~~~ f) 

impro_l and de\lelop. process to coor<lrulte trnO ~ onered to minimize the production .nd 

distribution of duplicOl!ive prOOucts 

Homeland Security Grants (Are. 11): OHS needs beI!er project informiltion and ooordiniltion 

arnofl\l fOlX overt~ granl PfO'l"""' 

~i::"~ ~~e~~~~~~~;=Yt:~:~~:,'"~'== f) Non-Disaster Grants M.;uugemenl s)'Stem ond respondir><J to the May 201 1 FEldA. report 

recommeodatioos on daY re<JlOrements. to ensure !hat FEldA. collects project inl""""tioo with !he 

leyel of debt needed kl better position the "'1"'f'ICY to identify ~ polential oor.ecessaf)' 

duplica:ion within and iK.fOSS !he /o;K 9flInt Pfll\jfa1TlS. weil/hiOQ an~ iIddrtional costs of ro!Ieclino 

~da:a 

Actioo 2 : To help reduce !he rtsI< of trtnecessary <lJpliciltion by slrengthenino the administrntion 

~~=~=~:,,,,,,, :,::;= ~:~~ =~=e f) the po!enliaf lor any unnecessary <lJplK:a:ion 

Actioo 3 : Coo!Iress may want 10 consider requ;mg OHS 10 report on tile reSlms 01 its eflorts to 0 identify and pre ...... 1 oor.ecessaf)' duplicatOO .,;thin oo across tile State Homefand Security 

Progrnm, Urban Areas SeclXily tnrt;;,tiye. Port Seeooty Grnnt Program . • nd Trnnsit Seeurity Grnnt 

Progrnm, .nd consider Ittese results .men m~l<i ng Jurure fUnding decisions lor loose JlfOQrnms 

From ~st:aI ye"", 2002 through 201 1, FEMA alk><:ated about $20.3 1>0""" to g",m recipients 

thrOO<j1 ~ Ioor programs 

Federat FltCitity Risk Asses.ments (Are. 18): Agencies are m"" ir><J dl4l1K:ate payments lor 

t.leitlty risk assessments by CCIfr(lIeting 1I>eir own assessments, .mile also P'I'/ina DHS lor 

~s.sessmen ts that the department Os rot perlorJninQ 
23 

Annual repoft = Areas identif"'" As""ument 

!;=.rt~~::'~H=ac:!tris:"'~~~~~ ~:::.;e f) SeNice (FPS) 10 develop inte<'rn sohl!ions fOf C<lfr(lIetif'IQ risk ssessments e addressin!l 100 

Risk Assessment ~ Ma""'JOOl"Ot I'ro!Iram's (RAMP) ~lIenges 

Action 2 : To add ~!he ~pk_1e<IeraI lac~risk ~ssessments condu<:led by roolliple 

~ties~~ ~O::~Of';':~~~~!:.!"=~~~!heto';'':~~~~ f) Action J : To address !he ~pk_1e<IeraI lac~risk ~ssessments condu<:led by roolliple 

=::~cS~~~=~~!:=<II~~~'!" ~::~~~~7wocelf'jS 0 OOpIic~OOo 

Informati"" Technology Inye.tment Management (Are. f9): The on\ce (;( Man"l)enlent ~OO 

Blldget aoo !he Dej><lrtrnents (;( Defense aoo Enerll'l need 10 address potentiaMy uphc~tive 

inform<l1ion t""""'*'9Y (IT) inveslments 10 avoid nv es~f'IQ in umeooss;ory systems. Identifying 

ond coosolidatif'IQ po:ent""'" ~~""tive IT inves:ments a!!he Dep;><tments (;( Defense aoo Energy could result in millions (;( dOlars in cost s,,,';ngs 

Action 5: To better ensure the agoencies 0I'I0id inveslinQ in <Il(l1K:a:Ne investments !he 

Secretaries of Defense. EnefllY, and Homeland Security ~ direCl1heir chief irlformaOOo omoors 10 correct !he rnisc;otegoriza:ions for !he investments GAO identified and ensure that 

investments are correcUy <Allegorized in agern:y sutmissions 

Dep.anment of Homeland Security Research.nd Development (Are'l): 8e1lerpoli~.nd 

<;I<li<!ance for oofOling, Ol/erSee1ng, and ooordirultif'IQ rese ... ch "nd oovek>p'nen! investments aoo 

activities \IoOOId help DHS address f"'"Jmen1<ltion. overlap. and poten:;"1 l.OIfIeCessary dupli<:a:ioo 

Action 1: The Secretary of HOOlelar>d Security should 00Ve1op and implement poIi~ _ 

<;I<li<!ancefor oofOling and overseeing research aoo oovelopmem (R&D) at the oopar1mem 10 

ensure that DHS e1feC1i\tety overs".,. its R&D inves:men! and efforts aoo redlXe5 fr.>o;Jmentabon, 

overlap, _ the risk of unnecessary dupl<Al!ion . Such polities "00 !/U1d"""" could be induded "s 

.n updale to !he oopar1ment's e)O)s~ f'IQ acquisitioo directive and sI>oukf incklde !he loIio'Mng 

elements: " lIIeU-u><lerstood rlefi nilioo 01 R&D 11\;01 p«>vides reasonable asstKafl<e that rellatoe 

OICCOUnting aoo repor1io<J of R&D fI!oSO<Jres "nd activi!ies for inlemal " 00 e><lema! use are adlieved; a descrll!ion (;( the depar1mem', process and roles aoo respoosibOlities for oversee;ng 

.nd COOfdi""ting R& D invesanents and e"orts; and a mechanism 10 tl<l"" existing R&D projects _ the ~ associated costs """"'" It>e dep...trnent DHS·s Science "nd TecIlnolog ~ DireC1OOl1e, 

Domestic Nude ... De!ection omce. aoo 100 U.S. CooS! Guard--1he ooy DHS components that 

report &{).fef~l ed I>udgeI .ul!lori1)' 10 OMB-<eported $568 mllion in sca l )'ear 2011 ~1 

au:horit;'. Howev .... , GAO idenlffied an add;tiooaf $255 miIIioo in R&D oI>Iig.;I:iorl5 in fiSCilf )'ear 

201 t by oltter DHS components that were no! reported 10 OMS in It>e bu<!gel process 

2013 Field·8 a""" Inlormalion Silaring (Area 8): To help reduce inemciencie5 resl.lllinglrom overlap 

in ~""')'Ii<Al 1 and investi<J~tive support "di,;ties. the Dep...trnents 01 Jus~ce ond Homeland 

Se<umy and !he OIII"" 01 N~1ioruI 1 Drug Contr~ Policy (ONDCP) could improve """""""tion 

"'"""II live types 01 field-based .,""""':ion sh<ll'in\l entities thai ""'Y col""". process. 'ruI~e, Of 

disseminate in""""'!ion in support 01 """ enforcement ~nd counterterroOsm-rebted e"orts-Joinl 

Terrorism Task FIIIl:es. Field InteHill"""" Groups, Regionaf Inl""""OOo SIlarinQ Syslems centers. 

slO11e arid major urt>.an ... ea tusioo " enters . .00 HioJh In:ensit;' [)ruo;j T",mcking Areas In ves illa~e 

Support Cenlers 

• 
24 

Annual repoft Areas identifH>d Assessment 

Actioo 1: The Se<retary 0I1-loolelar>d Se<ulity. the Attorney Gene ... I. ar>d the Dtrector of ONDeP 

sI>ouO:l ""'"' thfOOOJh the Inlormation Shar'<><J and Access Interaqer>CY Poliq Corrrui:tee Of 

otl>erwtse coIaboute to """"lop a mecn.nism ttI:It ",it! allow !hem to hold liek!-based ifllomlatOOS,"Uif'll ~ OICCOUntabie !or CII()f1jinatifl\l I'oith each other and moni:or and evaluate !tte 

ooordioa:ioo results acNeved 

Actioo 2: The Se<retary 0I1-loolelar>d Se<ulity. the Attorney Gene ... I. ar>d the Director of ONDeP 

sI>ouO:l ""'"' thfOOOJh the Inlormation Shar'<><J and Access Intera<}enCY PoIi<:y Corrrui:tee Of 

o!her\l,;.se coIaborate to iden1if'/ cI\Jracterislics of enti!ies ar>d assess speci~c !IOO!Iuphic areas in 

which praClires that coold enhance coordina:ion and re<!uee ~ry overl<lp. such as CfOSSen~ty p,;Irtitipa:ion on !/Ovemance boards and coIocabon 01 entiOOs. could be IUnher applOld. and 

use tile resutts to pro;;o:Je recommend.tions Of goo.nee to !tte ~ on implementifl\l these 

praclices 

..... 

• _ _ .""**'II-'l odioos_in .... ""'._e_ _~

()_p~ _ . ........ "''''''',<nO __ in ...... ''''_'''''''progreos 

_flot~meonirognooe"'1heo<tiono_in 

.bU! r.x ... ~_ _ 

........... _e_ ....... ,""".....,., . ..... '" ApJj 26. 20 1l. _ flo"" no! osoeooed1he20 IJ .. "",_ 

Table 5: Asse •• mem. 01 DHS's Proore •• in Addressing the Areas of Co.1 S.ving. IWld Revenue Enhancement. and Related 

ACliOll' Identified in 2011 - 201l Annual Repons 

Annual repoft ArellS ident~ied Assessment 

AWOfd Fee COOI""'15 (Are. 49): Adherente to guidance on award lee contrOlcts coukl imPfO'le 

"'JO'00es' "'" 01 <Iw.Ird ~ and produce ""vifl\lS. Several major "'JeIlcies spent over $300 billion • 

from fiscal )lear 2004 thfOOOJh fiS<AII vear 2008 on contracts that Onchxled mooetary incen~ves 

koown as ........ rd leH 

Actioo 1: SU'StaOned PfO!jfess in !tte use 01 award lees will fIlQUire thal contrOlcti"ll "'JeIlC~ 

_e to chan\jes to !he Federal Acquisition R"9llbtion. which in 2009 pro/llJiled 100 practices of • 

rollover III l.Oleamed ........ rd leH and awarding lees 10 contractors tmlt Mve peOOrmed 

oosatist.lcl'J<ily. Furlher eflorls are n eeded by "'JeIlcies to identi!y metOOds to e •• klale the 

elleCliveness 01 award l ees a. a tool !or impKlI'ifl\l conlr.>elor perlorJrulnee 
25 

Annual report AI""" id ent~ied 

Actioo 1: DHS should ensure tha! re<piremoots aCId cos! estimates are """" defined I4l froo! 

Actioo 2 : DHS should es!OOIi5h and measure performance oqainst dep'''tmeot-approved 

bas,"i~ for major aCQUisitioo progr.Jll1S 

Actioo J : DHS should ensure that its n"""anerot decisions are tr""SI>'Irem ......:l documen1ed; 

bY<I\Ie! <lecisions are informed by !he results 01 ocquisition reviews, iocWin9 acquisition 

infOllllatioo ......:l cost estimates; sullicieot m""~t reso<Xces are identified ......:l oIigned, sum .,; ilCquisitioo s:al!, to implemoot over>i<;lht reviews in a timely m.nne<; aoo a<QUisitioo PfOIjfam 

eQll ements are rel'iewed aoo validated 

Actioo 4: DHS ~ tal<e fuMe< actioos b iT(>rove rts mol research ......:l 

deveklp'l-.ent (R& D) efforts aoo reduct costs in proruing aCId deploying P'O!Imms lha1 ha"" oot been lilly tested, indl.'din9 ri<}orous/v testing devices using .ctual "III'ncy ~mtiooaI1actic5 

before mal<.ing decisioos on acqyisitions. GAO has revi'sed this acrioI1lO more c"'artv lows on 

DHS acquisiUon rna_t m1tterU1.n DHS R&D, ..tlich is addressed sep .... tely in GAO's 

Apoit 2013 ffij)OIt. Specifical y, GAO SI.IO}<Jffits that DHS sho<JId erlSUre thal testing 01 new 1echook>cJies is completed and tes1 results are addressed belore rnakin9 a<QUisitioo decision5 

Actioo 5 : DHS should conduct cost-benefIt analyses as pan of research, development, ......:l 

1e>tir>\i e!fo<t" whicI> would help OH3.rod <.00II<",-", de<i>ion mak e", ~Of ;00""" and 

priofitize in"""tmeot ded5ions, indudil<J assess;ng possible Pl'O!Iram ~ema!iv es thal could be 

more cost-<lffective . GAO has revised this ""bon to more cle.rIy k><:us 00 DHS a<quisition 

,""n~t m1herlhan DHS R&D, ch Is addressed separ.tely in GAO ~ 2013 repOf1 

Speci!ically, GAO suwests that OH S should ta,e ""lions to help decision makers beltef assess ......:l pOOritize investmeots. inckldif>\l poss;ble procJr.)(Il .Iternatives that ooukI be more cOSlef!ective 

TSA'. Beh.vior_885ed Scn,ening (Are. 77 ): Validation 01 !he Transportation Secooty 

Administmtioo's (TSA) beha'lior-base<t screening program is needed to jus:ily fIlndi"l Of 

-~ 

Actioo 2 : OHS ooukI oonduc1addi1iornl research to provide additiooal informatioo 00 the extern 

10 ..tlich!he Screen.'r>\I 01 P;ossengersbyOl>se",ation Techniques (SPOT) program can be 

ef!ec1i\lely implemented in airpOOs MId to help de1ermine !he need !or peOOdic refresher training 

ThOs ""tioo I'i"; revised 10 ronsoIida:e tt with acrioI1 1 c~ed in GAO'. March 2011 report 

Specifically, GAO suooests that OHS "'" an independent paool of experts to asses. !he 

me~ 01 its initial vali<btioo stu:ly 0{ the TSA beha'lior de:e<1ion program, ......:l oonduc1 

additiorlal research to PfO'Iide fOOher n !orma1ion and assurance on !he eXlent to wIlich the SPOT 

program can be e"ec~\IeIy implemen10d in airports, and to help cleterrnine the need 10< periodic 

refresher training 

As.essment 

() 

() 

() 

() 

() 

() 

() 

=r!e~~n:~ ~po"r~=~~mca~~~"'~~lreezin!l • 

appropriation levels 10< !he SPOT progr.m .t !he 2010 level .... Ii too valKlOltion effort Is COfIlpie1e 

Actioo 4 : Upon COIfJ>Ietion of !he valo:lOltion effort, Congress ma~ ....., llli'sh 10 coo9der!he 

s1U<!is resuns---- iI><:luding!he SPOTprogram'seffectiveness in using beha'lior-.b.!lsed oc ~ 

1echniQues to de1eC1 terrorists in !he a""tion en'liroomenl----in rnakinll fut ... e fooding decisions 

r"llar<lng !he program. Depending on the resu~s 01 OHS's valida:ion ef!Of1 ......:l OOO!Iressional 

""tion, sa,,;ngs <>'Ier !he next 5 ye .... cook! toIOIl tens 0{ milions of 00Ia<s 

Baggage Sc"'''''ing System. (Are. /8): More emdent ~ ocreeninQ systems ooukI result 

in .bout $410 ml tion in reduced TSA personnel costs <>'Ier too next 5 yea,,; 

o 

() 
26 

Annual repon 

2011 

2012 

2012 

2012 

Areas id ent~ied Assessment 

Cu .tom. Fee Collectioo ' 1i1rea 19): Ctanlyiog a"MabOlity 01 certain custOOl!llee coI!ections 

could produce a one-time ""vi"Js 01 $640 mi lion • 

Actioo 1: Coogress could dafity!he ~ tor whOch!he $639.4 mib,n in U~<I1ed 

baboces is a'r.libble. The tnObIi<Jdted balances have remained in U.S. CuslOOl!l.oo BOf<ler • 

Protecbon's 1C8P) CUstom. User Fee Accooot tor room lIIan 10 yea", 

=~~~~~~~l~rt~~=~':=rns~;';.!s~~~~~1e () 

costs WJId help oosure lIIe fl'O'.:lSl effective use 01 futlXe program 1ood~. CBP requested $242 

mil"", to flXld lIIe r.ew plan for lis.,... yeill 2012 

Actioo 1: To increase the lil<elihood 01 successU irr(>Iementoltioo 01 !he Arizona Border 

Sl.OVI!iNance Technolol/i' Plan. rrOnimize per10rmilllce risl<s assod<l!ed with !he r.ew app<oach, 

help jYSlify PfOIjfilllltuOOiog, iltId increase !he reliabili!;' 01 CBP cost esOO1a:e, the Commissioner 

01 CBP shoold determir>e !he mission befleflts to be <lerived from OmpIementa:im o1l11e plan 

Actioo 2: To increase the lil<elihood 01 successU irr(>IementOlbon 01 !he Arizona Border 

Sl.OVI!iiance Technology Plan. minimize pertormilllce risl<s assodOlied with !he r.ew approach, 

help jYSlify PfOIjfilllltuOOiog, iltId increase !he reliabili!;' 01 CBP cost esOO1a:e, the Comlnissloner 

01 CBP shoold de,etop ar.d apply ~ey artlibules IOf metriots to assess PfOIjfillll impiemen1<1tioo 

Actioo J: To increase the lil<elihood 01 successU iT(>IementOlbon 01 !he Arizona Border 

Sl.OVI!iNance Technolol/i' Plan. minimize per10rmilllee risl<s ;ossociOl1ed with !he r.ew approaeh, 

help jYSlify PfOIjfilllltuOOiog, iltId increase !he reliabili!;' 01 CBP's cosl estimate, Ihe 

Commissioner 01 CBP shoold upddte its cost estimate IOf the plilII using best "",Clites 

Actioo 4: Coogress may wisI1lO consider imitino;l Mure program 1Il00inQ ootH CBP lias more tulfy 

dehned the benefits ood cos:S 01 its Arizooa Border SUfl'eiltilll<e Tec~ Plan 

Possenger Aviation Security Fees 1Area 48): Oplions IOf adjYsting!he """""nger aviOll"", 

security fee could further oils'" biIion. 01 001"", in e .... a_ secooty costs. These O\ltioos 

could incre.se fee coI!ecbon'!rom about$2 bit"", to $10 _over 5 ye...-s 

() 

() 

o 

o Actioo 1: To help iurthe< otIset bOlIi<>M of 0011.", in the federal bud\let for alfia:ion secufity 

PfOIjfillllS . nd aCliIfities in ~ flscill yea"" Congress. WIlftinQ wrtl1 !he Administr.l1Of of TSA, 0 sI>ouId cooside.- increasin!!lhe p;tSSeflgef security lee accoo:liog 10 one 01 the O\l:iorn; GAO 

""'ntiffed in Februaty 2012. These indude the President·s 0..&1 Reduction Plan O\ltion 1$7.!iO 

per one-w;oy trip by 2011); the ConoJress""'iII Budget 0If""', Pre-..t's DeIlt CorrrnOsston, aoo 

Hoose Bud<}e! Conmirtee O\ltions 1$5.00 per one-way trip): TSA's Fiseal Year 2012 Budget 

RequeSioptioo 1$5.50 per ~nementby 2014); as wei! as adjusll"J!he lee for in1lation 

1accordin!! to GAO an:Jlysis: this option IMO<JId increase !he lee to about $3.00 per enpI.ar.emem) 

These options could iocrease lee coNeC1ion. O'Ier existi"J Ie\lels from about $2 bil lioI1lO $1 0 

billioI1 over 5 yea", 

ImmOgfBbon Inspection f ees1Area 49): The air passenger immigration inspect"'" user lee 

sI>ouId be reOO'Ned and adjusted to tuWv re<:G,er !he cos! 01 the air pas.seo<Jef irrImi<Jr.ltion 

inspecbon activitiesconWcted by OHS's U.S. lrmli<Jr.ltion aoo Cus:oms Entorcement 1ICE) iltId 

CBP ",tiler trum usin!! gene .... food approprj;l!ioos . In 2011 !his could have resulted in a reduction 

01 aboo1 $178 milio!1 in appropriated Il.flds used tor inspection seMces 

() 
27 

AmlOol repoft AreM idenmied Assessment 

Actioo I: To de! .......... tile e><lenno Mlich ilir p.;I sse~ i'mli<Jrntion inspecrior1 I~ ... e ali!lood 

with the costs of inspec!ioo aelivi!ie5, ",toch could enable lee adjl.OSlmems 10 reduce ..... """" OIl 0 9<'00fa! !uod ~ations. CoooJress may ";s!l !o feQYire!he Seere:..r,' 0/ HorrIelaoo Security to 

eQU~e ICE and CBP to re<J"'arty report on !he tobt cos! of at p;l s~ ~ inspe<1ioo5 

.00 tile amooll1 0/ as.socia1ed lee ooIIeetions 

Actioo 2: CoooJress may";s!l to require !he Seem:"r,' 0/ HooIeIaod Security to ildjl.OSt tile fee as =::n ':, ':':. :::::;::!~.;"': ..:,~. !st~~ acr!a~~al 0 revised 10 rellect e"orts by ICE aoo CBP to detem1ioe tile ex!ell1 to Mlich ~fOItion l ee 

collections !XI"'" reimbtxsable aetM!ies. Speci!lcaIPy, GAO is stJg<JeS~ fl!I1toIt Congress may wisI1 

10 adjus! the iflYl1igr.tior1 inspocboo l ee as needed so that ::ofioctions are ali!lood ",;th IOtal 

inspection costs, flOW that ICE and CBP ha"" de:ermiood flat total immigr.tion l ee coIleclions do 

"'" cover total immigr.tioo iospocboo costs 

=:,J~';.~t=::::: ~ e=I~~-:r:'=.~:...a.;:.,~r>ed f) 9<'00fa!!uod ~.tions. CoooJress may";s!l 10 feQYire!he Seere:..r,' 0/ Homefaoo Secur'o!y to 

<lireC1 ICE 10 amend its cost snxtv methodology to delerm11e!he extent to which air passe"ll"r 

l ee coIJoctions !XI"'" reimbursable .elivi!ie5 

:, ~':.~!=~ ::= ~ se=I:::::::"'":=~":::"~ood 0 <;jeOOfa! !uod ~0I1i0ns. CoooJress may wish 10 feQYire!he Seere:..r,' 0/ Homefaoo Secur'o!y to 

<lireC1 ICE and CBP to esta ~lsh a regutar schedu", to review.nd coordi",,:e on the costs 0/ 1he<r 

respoc1iw ilir p;I~ "' tion inspeclion aelivilies, .,'" revise the proportion o/!he lee 

re<:ei'<OO by each "'Jeocy accordir><1v 

Domestic DisHier Assistar.ce (illea 5 1): The Federa! Ernerll"flC)' Ma_t A!Jer.cy 

(FEldA) could reduce tile costs 10 the Iederal oovemment refated to major disaslers <ledared by 

!he Pr..-rtt by t4ldatio<J the prir>cipal rocator OIl which <lisaSl"" lundill\l <Iocisions are based 

.nd better me;osurir>ll a sldte'. capacily 10 respond ";lhoo1lederal assislar.ce 

Actioo I : The FEldA AdminOsmt:or sIto<Jfd re..,xamine the basis lor the Ptt>fic Assislar.ce per 

capi\;I iOOic<ttor .nd determine whether ~ acct.r.ttef)o reRern a slate's capacity 10 respood 10 aoo 

rocover!rom a dis<rster I'oi:!loot federa! assisl.""". This acm "'""s revised 10 coosolldate the 

three actions crted in GAO's Februar,' 2012 ffij)OI! into one action "" a resuft 01 GAO's Seplember 

2012 report. Federal [);saster Assislance : Improved Cri1eri. Needed to Assess a Jt.irtsdiction's 

C.pabililylO R.,,;por>d.nd Re<:o.er OIl Its OM! (GAO-I2--838). SpecilkAlltv, in 1h<tt report GAO 

rocommeOOed thilt to irtae""e the ellicieocy and enectNeIless o/!he process for disaster 

<Iocbr.tions, the Admioislr.l1or 0{ FEldA shoold <le\'efop ard implemen1 a methOOolo!Jy that 

provides • more comprehensrre as.sessmoot 0/ • jurisdic1iort's cap""i~ to respood 10 aoo 

rocover!rom a disaster I'oi'tlooI federa! assisla""". Pr<>Vi<1in9 a more rompre/lensive assessment 

of a jOOsdicboo's cOlp;lbdily to respond to and fOCO'/er Irom a disaSl .... ",;t!loo1 Iederal ""sisl.r.ce 10 

support disast .... dectafOltion <Iocisions could sa"" bO liorls d OOfJars. This shooId include one or 

mor~ ffiOX<K ... cf. ju<iWi<_'. _ .. <"".my .• ""h • • Tot,. 1=1>10 ROO<O<K< .... :>Od 

ooosidefOltion o/!he jurisdietioo's response and re<:o.e-ry capabOlit ..... H FEMA coobOOes to use 

!he PubIi<: Assislance per tapila iOOiciltor to assist in identJ)'inQ a jt.oisdiction's capabdit;.,s b 

r.,,;pond to and recover from a <lisas: ..... ~ should adjust ttI€ iOOic<ttor 10 acClX.te/y relied the 

.......... ~ in !he U.S. eoooomy "IO'''' 1986, when the cooent iOOic<ttor "'""s hrst adopted lor 

U'se . In addiUort, ~ the adjustment by raisfnQ trn iOOicalor in slepsover se • ....-af ye.rs 

would iii"" jurisdiClions more true to plan lor and adjust to!he chao<}e 

o 

o 
28 

Mr. DUNCAN. Thank you, Ms. Berrick. 

The Chairman will now recognize Ms. Richards for her testimony. 

STATEMENT OF ANNE L. RICHARDS, ASSISTANT INSPECTOR 

GENERAL FOR AUDITS, OFFICE OF INSPECTOR GENERAL, 

U.S. DEPARTMENT OF HOMELAND SECURITY 

Ms. RICHARDS. Good morning Chairman Duncan, Ranking Member Barber, Ranking Member Thompson, and Members of the subcommittee. Thank you for inviting me to testify today. 

In the 10 years since its establishment, the Department of Homeland Security has made progress in addressing the challenges it 

faces to accomplish its mission and in laying the groundwork to effectively manage its resources; however, to successfully fulfill its 
29 

vital mission to protect and secure our Nation, DHS must continue 

to overcome challenges that hinder its efforts. 

Our recommendations are designed to assist the Department and 

its components in addressing and overcoming their most persistent 

challenges. In the past 10 years we had issued about 8,000 recommendations of which about 15 percent remain open. Those open 

recommendations identified a total monetary effect of about $650 

million. 

We believe that by implementing our recommendations, DHS will 

continue to improve the effectiveness inefficiencies of its operations. 

My testimony today will address some of the highest priorities, 

short- and long-term open, that is to say on implemented, recommendations that we have made to DHS. These recommendations 

address the Department’s critical mission areas of the border security and disaster preparedness and response as well as accountability issues related to financial and IT management. 

In an effort to be mindful of your time, I would like to focus on 

just a few of the recommendations included in my full statement. 

These recommendations addressed interoperable communications, 

financial management, and FEMA’s process for tracking public assistance insurance requirements. 

We reported in November 2012, that although DHS established 

an internal goal of developing interoperable radio communications 

and identified common channels to do so, it had not achieved that 

goal. Only one out of 479 radio users we reviewed could access and 

communicate using the specified common channel. 

Only 20 percent of radios that we tested contained all the correct 

program settings for this common channel. We recommended that 

DHS establish a robust governance structure to ensure that the 

components achieve interoperability as well as develop and disseminate policies and procedures to standardize Department-wide 

radio activities. 

Also in fiscal year 2012, DHS produced auditable financial statements and obtained a qualified opinion on those statements, but 

challenges remain in financial management including the need to 

improve and integrate the Department’s financial management systems. 

We also recommended that DHS continue its financial systems 

modernization initiative and improve the Department’s financial 

management systems. This is an example of a recommendation 

that will take significant time and effort to implement. 

The Department has worked to improve its financial systems for 

several years and is currently pursuing a strategy to improve the 

financial systems at individual components such as the Coast 

Guard and FEMA. 

Our December 2011 report of FEMA’s process for tracking public 

assistance insurance requirements included recommendations to 

help resolve long-standing insurance-related issues. 

The Stafford Act encourages State or local governments to protect themselves by obtaining insurance to supplement or replace 

Federal Government assistance. 

To receive public assistant grant funding and be eligible for funding in future disasters, the act requires applicants to obtain and 

maintain insurance on damaged insurable facilities; however 
30 

FEMA’s public assistance program includes disincentives for applicants to carry this insurance. 

For example, the program pays for building repair following a 

first disaster, which reduces the incentive for building owners to 

purchase insurance if they had not previously received a disaster 

assistance. 

In addition, FEMA reimburses deductible amounts in insurance 

policies regardless of the amount of the deductible, which encourages high deductibles. 

In our December 2011 report we recommended that FEMA complete the rulemaking process begun in 2000 and issue a final rule 

that resolves the long-standing issues with public assistance insurance regulations including those related to deductibles and self-insurance. 

The Office of Inspector General continue to analyze the Department’s programs and practices to identify those that they need improvement, determine how DHS and its components can address 

deficiencies and weaknesses, and recommend appropriate solutions 

to strengthen the Department. 

Mr. Chairman, this concludes my prepared statement. I welcome 

the opportunity to address any questions you might have on our efforts to improve the effectiveness of DHS. Thank you. 

[The prepared statement of Ms. Richards follows:] 

PREPARED STATEMENT OF ANNE L. RICHARDS

APRIL 26, 2013 

Chairman Duncan, Ranking Member Barber, and Members of the subcommittee, 

thank you for inviting me here today to discuss cutting duplication and wasteful 

spending, and implementing private-sector best practices and watchdog recommendations at the Department of Homeland Security (DHS). 

My testimony today will address some of our high-priority short- and long-term 

open recommendations we have made to DHS, which were included in reports 

issued between December 2011 and December 2012. 

In the 10 years since its establishment, DHS has matured and made progress in 

addressing challenges to accomplishing its mission, and it has laid the groundwork 

to manage its resources effectively. However, to fulfill its vital mission of protecting 

and securing our Nation successfully, the Department must continue to overcome 

challenges that hinder its efforts. The high-priority open recommendations from the 

reports discussed below illustrate our efforts to assist DHS and its components in 

addressing and overcoming the most persistent challenges they face. We believe that 

by implementing these recommendations, DHS will continue to improve the effectiveness and efficiency of its operations and reduce the potential for waste and duplication of effort. 

BACKGROUND

Since DHS–OIG’s inception we have made over 8,000 recommendations to the De- partment and its components identifying over $2.6 billion in questioned costs, unsupported costs, or funds that could be put to better use. Approximately 15% of 

these recommendations remain open, representing about $650 million. 

Our December 2012 report, Major Management Challenges Facing the Department 

of Homeland Security—Revised, summarized and assessed the Department’s 

progress in addressing its most serious management challenges. We grouped these 

challenges into the mission areas of intelligence, transportation security, border security, infrastructure protection, and disaster preparedness and response; and accountability issues of acquisition management, financial management, IT management, grants management, employee accountability and integrity, and cybersecurity. 

BORDER SECURITY

Our report, CBP’s Use of Unmanned Aircraft Systems in the Nation’s Border Security (OIG–12–85), issued in May 2012, covered our audit of U.S. Customs and Bor-
31 

1 Emergency Communications—Various Challenges Likely to Slow Implementation of a Public 

Safety Broadband Network (GAO–12–343, February 2012). 

der Protection’s (CBP) efforts to establish a program for its unmanned aircraft systems (UAS). In this report, we made a recommendation to improve CBP’s UAS program planning, which is still open and considered a high-priority short-term recommendation. In November 2012, we issued a report, DHS’ Oversight of Interoperable Communications (OIG–13–06), which includes a high-priority, short-term open 

recommendation that DHS establish policies and procedures to standardize radio 

communications. 

CBP’s Program for Unmanned Aircraft Systems 

CBP’s Office of Air and Marine (OAM) is responsible for protecting the American 

people and the Nation’s critical infrastructure through the coordinated use of integrated air and marine forces. Air and marine forces are used to detect, interdict, 

and prevent acts of terrorism and the unlawful movement of people, illegal drugs, 

and other contraband toward or across U.S. borders. UASs provide command, control, communication, intelligence, surveillance, and reconnaissance capability to 

complement crewed aircraft and watercraft, and ground interdiction agents. After the pilot of the UAS program, Congress appropriated more than $240 million to establish the program within CBP. During our 2012 audit, CBP stated it had 

expended $152.3 million to purchase nine unmanned aircraft and related equipment 

and, at that time, had seven operational aircraft. After our audit, in late 2011, CBP 

received two additional aircraft and was awaiting delivery of a tenth aircraft purchased with fiscal year 2011 funds. Each aircraft system cost approximately $18 

million. 

We reported that CBP had not adequately planned resources needed to support 

its current unmanned aircraft inventory. Although CBP developed plans to use the 

unmanned aircraft’s capabilities to fulfill OAM’s mission, its Concept of Operations 

planning document did not sufficiently address processes: (1) To ensure that required operational equipment, such as ground control stations and ground support 

equipment, was provided for each launch and recovery site; (2) for stakeholders to 

submit unmanned aircraft mission requests; (3) to determine how mission requests 

would be prioritized; and (4) to obtain reimbursements for missions flown on stakeholders’ behalf. With this approach, CBP risked having invested substantial resources in a program that underutilized assets and limited its ability to achieve 

OAM mission goals. 

Because UAS is critical to protecting the American people and our infrastructure, 

CBP needed to improve its planning to address the UAS program’s level of operation, funding, and resource requirements, along with stakeholder needs. Thus, we 

recommended that CBP analyze requirements and develop plans to achieve the UAS 

mission availability objective and acquire funding to provide necessary operations, 

maintenance, and equipment. 

DHS’ Oversight of Interoperable Communications 

DHS includes a network of organizations that work together to prevent and respond to terrorist attacks, other threats, and natural disasters. Such collaboration 

requires that DHS components establish effective communication among external 

and internal partners during operations. DHS established an internal goal of developing interoperable radio communications and identified common channels. To meet 

communications requirements, DHS components invested about $430 million in 

equipment, infrastructure, and maintenance. Although DHS created policies, guidance, and templates to aid in achieving interoperability and provided more than $18 

million in assistance to State and local agencies, full interoperability remains a distant goal, according to a 2012 Government Accountability Office report.1

In our November 2012 report we noted that, although DHS had established a goal 

for interoperability and common radio channels, only 1 of 479 radio users we reviewed could access and communicate using the specified channel. Furthermore, 

only 78 of 382 or 20 percent of radios that we tested contained all the correct program settings, including the name, for the common DHS channel. Additionally, DHS 

did not establish an effective governing structure with authority and responsibility 

to oversee achievement of Department-wide interoperability. Without an authoritative governing structure to oversee emergency communications, DHS had limited 

interoperability policies and procedures, and the components did not inform radio 

users of DHS-developed guidance. 

Because of this limited progress in interoperability, personnel could not rely on 

interoperable communications during daily operations, planned events, and emergencies. We recommended that DHS create a structure with the necessary authority 
32 

to ensure that the components achieve interoperability and to develop and disseminate policies and procedures to standardize Department-wide radio activities, including program settings, such as naming conventions, to ensure interoperability. 

DISASTER PREPAREDNESS AND RESPONSE

Our December 2011 report, FEMA’s Process for Tracking Public Assistance Insurance Requirements (OIG–12–18), includes a high-priority, long-term recommendation to help resolve long-standing insurance-related issues. In January 2012, we 

issued a report related to Federal Emergency Management Agency’s (FEMA) response to Hurricane Katrina, Efforts to Expedite Disaster Recovery in Louisiana 

(OIG–12–30), in which we made a short-term and a long-term recommendation, both 

related to closing out Public Assistance (PA) projects and both of which we consider 

high-priority and both are open. 

FEMA’s Process for Tracking Public Assistance Insurance Requirements 

FEMA’s PA grants totaled more than $10 billion for all disasters declared between 2007 and 2010. Of that amount, the component provided $1.3 billion for buildings, 

contents, and equipment owned by State, Tribal, and local governments, as well as 

by private non-profit organizations. Since fiscal year 2009, we have issued 19 financial assistance grant reports that included findings pertaining to PA insurance requirements, which involved duplicate benefits, incomplete insurance reviews, and 

applicants who either did not obtain adequate insurance or did not file an insurance 

claim. 

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford 

Act) encourages State and local governments to protect themselves by obtaining insurance to supplement or replace Federal Government assistance. To receive PA 

grant funding and be eligible for funding in future disasters, the Stafford Act also 

requires applicants to obtain and maintain insurance on damaged insurable facilities. However, FEMA’s PA program includes disincentives for applicants to carry insurance. For example, the program pays for building repair following a first disaster, which reduces the incentive for building owners to purchase insurance if they 

have not previously received disaster assistance. In addition, FEMA reimburses deductible amounts in insurance policies, regardless of the amount of the deductible, 

which encourages high deductibles. 

FEMA has been aware of these and other equity issues and disincentives for more 

than a decade. In February 2000, FEMA published an advance notice of proposed 

rulemaking in the Federal Register that addressed insurance requirements, procedures, and eligibility criteria with respect to buildings under the PA program. However, FEMA has not issued a final rule and stated that these issues have not been 

acted on because regulatory review and rulemaking for other programs have taken 

precedence. Consequently, the disincentives and equity issues continue, and PA program regulations do not provide adequate guidance to those who receive, grant, or 

oversee PA grants. 

In our December 2011 report, we recommended that FEMA complete the rulemaking process begun in 2000 and issue a final rule that resolves the long-standing 

issues with PA insurance regulations, including those related to deductibles, self-insurance, and State insurance commissioners’ determinations of reasonably available 

insurance. In February 2013, FEMA rescinded the policy of reducing eligible costs 

by an insurance deductible by deducting all insurance proceeds received or anticipated from the total eligible cost of the project. This change in policy provides further incentive for applicants to not carry insurance or, if they do, to choose the highest deductible possible. 

FEMA’s Efforts to Expedite Disaster Recovery in Louisiana 

Under the authority of the Stafford Act, FEMA provides Federal disaster grant 

assistance to State, Tribal, and local governments and certain private nonprofit organizations through the PA program. FEMA has an obligation to ensure timely and 

appropriate use of Federal disaster funds. In January 2012, we reported that only 

6.3 percent of the PA projects for Louisiana had been closed out in the 6 years since 

Hurricane Katrina made landfall. Many of these projects are years past the closeout deadlines. 

Although FEMA has worked with Louisiana to expedite the recovery effort, several factors have contributed to the slowness in closing out PA projects. Specifically, 

the Federal Government provided 100 percent funding of PA projects. The State of 

Louisiana does not pay for projects and has no incentive to seek cost-effective replacement or repair solutions, close completed projects, or reduce the disaster workforce as work is completed. Other factors, such as the project procurement process, 

inconsistent decisions for applicant eligibility, and determining whether to replace 
33 

2DHS–OIG, Independent Auditors’ Reports on DHS’ FY08, 09, 10, 11, and 12 Financial Statements and Internal Control Over Financial Reporting (OIG–09–09, November 2008; OIG–10–11, 

November 2009; OIG–11–09, November 2010; OIG–12–07, November 2011; OIG–13–20, November 2012). 

or repair, as well as limited State staff resources, also contributed to delays in closing PA projects. 

Because open PA projects could involve substantial amounts of obligated Federal 

funds that could be put to better use, we recommended in the short term, that 

FEMA develop and implement specific policies, procedures, and time lines to ensure 

timely closeout of 100 percent Federally-funded projects. For the long term, we recommended that FEMA evaluate the status of all PA projects in Louisiana associated 

with Hurricane Katrina and develop, in conjunction with the State, a process to 

close completed projects and to expedite the completion of open projects. 

FEMA took several actions to respond to our recommendations. Specifically, the 

component completed the draft of an updated standard operating procedure for PA 

program management and grant closeout. In addition, FEMA began implementing 

a training course, which was scheduled for a pilot release in fiscal year 2013, to address the PA program process and the roles and responsibilities for closeout activities. FEMA also developed a procedure to track the progress of recovery and the 

movement toward programmatic closeout of Hurricanes Katrina, Rita, Gustav, and 

Ike projects. 

FEMA also worked with the State of Louisiana, which developed a closeout process to ensure that each applicant and project met the eligibility requirements and 

document standards mandated by Federal and State regulations. In addition, FEMA 

developed and communicated clear goals for subgrantees to certify that projects 

were completed, which provide an incentive for meeting these goals. FEMA conducted a complete review of the project closeout process used by the State. The average number of projects closed monthly increased by 300 percent for Hurricanes 

Katrina and Rita in the first quarter of fiscal year 2013. We will review these efforts 

to determine whether they have successfully resolved the recommendations. 

FINANCIAL MANAGEMENT

DHS is responsible for an annual budget of more than $59 billion, employs more 

than 225,000 men and women and operates in more than 75 countries. Sound financial practices and related management operations are critical to achieving the Department’s mission and to providing reliable, timely financial information to support 

management decision making throughout DHS. Although DHS produced auditable 

financial statements in fiscal year 2012 and obtained a qualified opinion on those 

statements, challenges remain for the Department’s financial management. One 

high-priority, long-term challenge is the improvement of the Department’s financial 

management systems. 

Independent Auditors’ Report on DHS’ Fiscal Year 2012 Financial Statements and 

Internal Control Over Financial Reporting 

An independent public accounting firm, KPMG LLP, performed the integrated 

audit of the DHS financial statements for fiscal year 2012 and an examination of 

internal control over financial reporting and compliance.2 KPMG considered the effects of financial system functionality in its tests and determined that many key 

DHS financial systems are not compliant with the Federal Financial Management 

Improvement Act of 1996 (FFMIA) and Office of Management and Budget Circular 

Number A–127, Financial Management Systems, as revised. DHS financial system 

functionality limitations add substantially to the Department’s challenges of addressing systemic internal control weaknesses, as well as limit its ability to leverage 

IT systems to process and report financial data effectively and efficiently. 

Specifically, KPMG identified the following persistent, pervasive financial system 

functionality issues: 

• An inability to process, store, and report financial and performance data to facilitate decision making, safeguarding and management of assets, and preparation of financial statements that comply with generally accepted accounting 

principles. 

• Technical configuration limitations, such as outdated systems that software 

vendors can no longer fully support, that impair DHS’ ability to comply with 

policy in areas such as IT security controls, audit logging, user profile changes, 

and restricting departing employees’ and contractors’ access. 

• System capability limitations that prevent or restrict the use of applications 

controls to replace less reliable, more costly manual controls. In some cases, ad-
34 

ditional manual controls must compensate for IT security or control weaknesses. 

Additionally, KPMG determined that the United States Coast Guard (USCG): 

• Is routinely unable to query its various general ledgers to obtain a population 

of financial transactions and consequently, must create many manual custom 

queries that delay financial processing and reporting processes. 

• Has a key financial system that is limited in processing overhead cost data and 

depreciation expenses to support the property, plant, and equipment financial 

statement line item. 

• Uses production versions of financial statements that are outdated and do not 

provide the necessary core functional capabilities (e.g., general ledger capabilities). 

• Has a budgetary module of the core financial system that is not activated. As 

a result, key attributes (e.g., budget fiscal year) are missing and potential automated budgetary entries (e.g., upward adjustments) are not used. This has created the need for various manual workarounds and nonstandard adjustments. 

• Has a financial systems functionality limitation that is preventing the component from establishing automated processes and application controls to improve 

accuracy and reliability, and to facilitate efficient processing of certain financial 

data, such as receipt of goods and services upon delivery and ensuring proper 

segregation of duties and access rights. 

KPMG concluded in its report that these findings limit DHS’ ability to process, 

store, and report financial data in a manner that ensures accuracy, confidentiality, 

integrity, and availability. KPMG emphasized that some of these weaknesses may 

result in material errors in financial data that go undetected through the normal 

course of business. Additionally, because of financial system functionality weaknesses, there is added pressure on mitigating controls to operate effectively. Mitigating controls are often more manual, which increases the risk of human error that 

could materially affect the financial statements. We recommended that the DHS Office of the Chief Information Officer, in conjunction with the Office of the Chief Financial Officer, continue the Financial Systems Modernization initiative and make 

necessary improvements to the Department’s financial management systems. 

IT MANAGEMENT

As technology constantly evolves, the protection of the Department’s IT infrastructure becomes increasingly important. The Department’s chief information officer has 

taken steps to mature IT management functions, improve IT governance, and integrate IT infrastructure. 

CYBERSECURITY

The firewall of cybersecurity—the technologies, processes, and practices that protect our systems from attack, damage, or unauthorized access—is always on alert 

for threats to networks, computers, programs, and data. In 2012, we recommended 

actions to address weaknesses in DHS’ international cybersecurity program. 

DHS’ International Cybersecurity Program 

Our Nation’s economy and security are highly dependent on the global cyber infrastructure. The borderless nature of threats to, and emanating from, cyberspace 

requires robust engagement and strong partnerships with countries around the 

world. International engagement is a key element of the DHS cyber mission to safeguard and secure cyberspace. DHS’ National Protection and Programs Directorate 

(NPPD) promotes cybersecurity awareness and fosters collaboration with other countries and organizations to global cyber space threats. 

In our report DHS Can Strengthen Its International Cybersecurity Programs 

(OIG–12–112), which we issued in August 2012, we reported that NPPD had undertaken actions to promote collaboration with the international community and develop partnerships with other nations to protect cyberspace better. However, NPPD 

had not defined its roles for carrying out the mission of its international affairs program, nor had it developed a strategic implementation plan to provide a clear plan 

of action for achieving its cybersecurity goals with international partners, international industry, or the private sector. In addition, NPPD had not streamlined its 

international affairs functions and processes to support its international cybersecurity goals, objectives, and priorities efficiently, nor had had it effectively consolidated resources. Lastly, NPPD needed to strengthen its communications and information-sharing activities with international partners to promote international incident response, exchange of cyber data with other nations, and to share best practices. We recommended that DHS develop and implement policies and procedures 
35 

for establishing and maintaining open dialogues with foreign partners regarding 

cyber threats and vulnerabilities. 

STEPS TAKEN TO IMPLEMENT HIGH-PRIORITY RECOMMENDATIONS

DHS and its components are taking steps to implement these high-priority recommendations to improve and strengthen program management with which it 

agreed. In most instances, however, particularly for long-term recommendations, it 

takes time to develop plans, revise and update guidance, and implement and disseminate new policies and procedures. This can be particularly time-consuming 

when, as is usually the case, such plans, policies, and procedures require coordination and concurrence among multiple entities, including some outside of DHS and 

its components. Competing and changing priorities and funding uncertainties also 

affect the Department’s ability to implement multiple recommendations quickly. In 

addition, some recommended improvements require funding and staffing resources 

that are not readily available. 

Although DHS has made a number of attempts over the years to improve and integrate its financial systems, for various reasons, it has not yet successfully completed this complicated task. For example, because of a vendor protest, a contract 

for an enterprise-wide initiative had to be cancelled. In addition, in June 2010, the 

Office of Management and Budget (OMB) required all agencies to halt the issuance 

of new task orders or new procurements for all financial system projects pending 

its review and approval. In an effort to comply with the OMB requirement, DHS 

began upgrading existing financial systems at some components. Projects aimed at 

improving financial and IT systems are scheduled to be implemented at the USCG 

and FEMA in fiscal year 2013. 

QUESTIONED COSTS

From April 1, 2012 through September 30, 2012, our audits resulted in questioned costs of more than $235 million. During this same period, DHS recovered approximately $115 million as a result of disallowed costs identified in current and previous 

audit reports and from our investigative efforts. We issued 12 reports identifying approximately $101 million in funds that could be put to better use. 

CONCLUSION

We encourage Congress and this subcommittee to continue its oversight of DHS 

and its components to ensure effective and efficient program management and 

sound financial practices. For our part, we will continue to analyze the Department’s programs and practices to identify those that need improvement, determine 

how DHS and its components can address deficiencies and weaknesses, and recommend appropriate solutions to strengthen the Department. We understand that 

our recommended corrective actions will strengthen DHS only if they are implemented. Therefore, we will also continue our efforts to follow up with the Department to make certain that it carries out its mission as effectively and efficiently as 

possible. 

Mr. DUNCAN. Thank you, Ms. Richards. 

The Chairman will now recognize Dr. Stern for his testimony. 

STATEMENT OF PAUL G. STERN, PH.D., MEMBER, BOARD OF 

DIRECTORS, BUSINESS EXECUTIVES FOR NATIONAL SECURITY 

Mr. STERN. Chairman Duncan, Ranking Member Barber, Members of the committee, my name is Paul G. Stern, and I am honored to be here as a private citizen and a member of the Business 

Executives for National Security. 

BENS is a nonpartisan organization of business executives like 

myself concerned about National security. The views I express here 

today are my own although they reflect in great part BENS’ perspectives on better management to our National security organizations. 

My personal experience has been mostly in mergers and acquisitions and turnaround of businesses in the private sector. I will 

make my comments brief and ask that with permission, with the 
36 

committee’s permission, my written testimony be entered into the 

record. 

The focus of the hearing is how to find cost savings by eliminating duplication in the Department of Homeland Security. Merging and combining functions to improve efficiency and effectiveness 

is basic to good management, but Government has often—skips the 

crucial next step; that is rationalizing or reducing the organization 

once the functions have been marched. 

To get the cost savings you have to review very objectively and 

aggressively the quality of management, make changes of leadership when necessary, stress and emphasize the financial organization as well as IT systems so that they enable management to 

track the progress of cost reductions, accurately identify the cost of 

inventory because it tends to tie up significant sums of cash, and 

to use the human resource function to help the transition of individuals both in and out of the organization. 

In addition to ridding the Department of redundancy, there are 

other management areas that in the private sector have proven to 

contribute as much if not more to the success of the organization 

and the bottom line. 

I have outlined 11 of them in my written testimony. For example, 

they range from eliminating excess real property, streamlining the 

levels of management, of management review and approval that 

tends to slow down progress, and by that I mean the flattening of 

the organization charts as well as evaluating compensation incentives and benefits for those people involved. 

What I do not believe in is making arbitrary percentage cuts 

across organizations in order—as a means of cost reduction. It is 

not thoughtful nor is it good management. 

What does work is setting objectives and measuring performance, 

providing incentives and bonuses that are tied to specific measurable performance objectives and then rewarding management for 

achieving these performance objectives and these are sure ways to 

ensure to get good results. 

These things are hard to do, and I appreciate the challenge that 

the Department faces in looking across 22 separate units. Response—in 2002 when Congress voted to create the Department of 

Homeland Security, it did so to streamline and integrate the elements of Government needed to protect our homeland. 

Unfortunately it didn’t apply the same discipline to itself and 

today, 10 years later, we still have considerable duplication and 

overlap in the jurisdiction and oversight level levied on the Department by the various committees of Congress. 

How can DHS manage efficiently and effectively with so many 

oversight restrictions? Congress could do better by applying the 

same management techniques that I have suggested for the Department. 

Give DHS specific short- and long-term performance objectives 

for improving effectiveness and cutting costs. Make sure that the 

right management team is in place. Focus your oversight function 

solely on measuring those performance objectives, and reward performance, but let management and do its job. 

Many of the business processes and organizational structures 

which back up our Nation’s security have the analogs in the pri-
37 

1Dr. Stern has held numerous senior management positions with IBM. He was chairman and 

chief executive officer of Braun AG in Germany, corporate vice president at Rockwell International Corporation and president of their Commercial Electronics Operations. Dr. Stern joined 

Burroughs Corporation (later Unisys) as an executive vice president and rose to become the 

president and chief operating officer. From 1988 to 1992, he served as the chairman and chief 

executive officer of Northern Telecom, now known as Nortel Networks. In private equity, he 

joined Forstmann Little & Co. in 1993, and, later, co-founded Thayer Capital Partners, LLC, 

prior to starting Arlington Capital. 

vate sector. As in the private sector, people in the heart of any attempt to change whether a successful change is taking place can 

be answered—addressed by a simple set of questions and they are: 

Why are you here? Why are you coming to work? What makes you 

think that you are making a difference? If you are gone, what effect 

would that have on the remaining organization? 

I am confident that with the help of this committee, the Department can make organizational changes in its overhead and infrastructure functions that can put it in the company of the best-managed organizations, both public and private, in the Nation. 

I thank you for inviting me to testify, and I am prepared to answer questions that you might have. Thank you. 

[The prepared statement of Mr. Stern follows:] 

PREPARED STATEMENT OF PAUL G. STERN

APRIL 26, 2013 

Chairman Duncan, Ranking Member Barber, Members of the committee, my 

name is Paul G. Stern. I am honored to be here as a private citizen and a member 

of Business Executives for National Security. I plan to address, from the business 

perspective, several areas of your concern. I will speak from my own knowledge and 

operational experience. I have spent my career in strategic planning, corporate 

mergers and acquisitions—and, most recently, in private equity financing for corporate restructuring and improved shareholder performance. 

I am a member of the Board of Directors of Business Executives for National Security, a non-partisan organization of business executives concerned about National 

security. Although reflective of BENS’ perspectives on what the private sector can 

contribute to better managing our National security organizations, the views I express are my own.1

A key focus of this hearing is, I believe, the opportunity for cost savings by eliminating duplication, particularly in research and development expenditures. I will 

comment on that issue. But, I will also suggest other management areas that, in 

the private sector, have proven to contribute as much, if not more, to improving the 

bottom line—or, more appropriately for the public sector, to improving organizational efficiency and effectiveness. 

1. ELIMINATING DUPLICATION AND WASTEFUL SPENDING

I think it important to understand the mechanics of eliminating duplication or redundancy. The objective is to merge and combine overlapping functions, which is 

readily accomplished by redrawing organization charts and ‘‘x-ing’’ out redundant 

units. However, the next step is crucial. That is, rationalizing the organization to 

reduce its size and cost. This is hard, because it ultimately means moving people 

out of the organization and changing policies and procedures to match the new 

scope and mission. The Government does not do this well. 

Here are some considerations from my private-sector experience that you might 

appreciate. 

The goal of eliminating duplication and overlap is to improve effectiveness. If this 

objective can be achieved, cost savings will surely follow. However, effectiveness is 

measured only over the long term, so one needs an interim tool or tools to gauge 

progress. I suggest two: Managerial performance and attention to financial expenses. 

You need to get managers to perform and you need to know the cost of operations. 

Here’s how: 

• Review management aggressively: Qualifications, capability, willingness to execute the plan. Make changes to leadership, if necessary. 
38 

• However, find ways to positively reinforce change through incentives and bonuses tied to performance objectives. 

• Be cautious in trimming the financial function. You need the data they provide 

to know and control expenses. 

• Manage IT platforms with an eye to collecting accurate financial data. 

• Track expenses across all operating accounts. 

• Audit cost of inventory to determine where resources are tying up organizational funds. 

• Look at the HR function. It tends to be overstaffed without adding a great deal 

of value, except where needed to help transition individuals out of the organization. 

• Finally, review layers of management with an eye toward flattening the organization. This allows you to place responsibility much closer to the act of decision 

making. 

• Because they slow down the decision process, buy things, and create staff, 

trimming the number of department heads saves more than just a salary. 

In sum, identifying redundancy, having accurate expense and performance data, 

and moving rapidly carries risk. But leaders must be prepared to take risk. 

Incenting the change makers, taking intermittent satisfaction surveys, and having 

the cliche ́d ‘‘skin in the game’’ has the ability to change hearts and minds quickly— 

especially when they see the success that changes are making. 

2. STRATEGIC BUSINESS PROCESS REORGANIZATION AND CHANGE

Let me turn to another set of management tactics and techniques that, as I mentioned, are prevalent in private-sector turn-arounds and restructurings. Applied aggressively and purposely, they can be equal or more productive than the elimination 

of redundancy that we just discussed. 

But first I must add a caveat: It is that while instituting change rapidly is better 

than moving slowly, enacting too much change too rapidly can be damaging to morale and counterproductive to effectiveness. Instead, choose a few transformative actions; follow through to completion, then choose the next set and repeat. 

The Department of Homeland Security under your purview is, by any measure, 

a conglomerate of diverse missions, capabilities, and functions. Even after 10 years 

under the same management umbrella, the Department is riven with conflicting cultures and customs. However, putting its face-to-the-public operating divisions aside, 

there is a common management infrastructure that is not at all unlike service-oriented private-sector businesses. Here is where I believe lessons from the private sector can be brought to bear on Government management challenges. 

The first two have already been discussed: 

(1) Eliminate duplication/redundancy while maintaining safety back-up; 

(2) Consolidate and appropriately rationalize functionally-related activities. 

Here are a few more to consider: 

(3) Eliminate excess real property. The Department of Defense has fought this 

battle with Congress since the late 1980’s, but has developed the Base Closure 

and Realignment (BRAC) process to bring practical resolution to this politically 

unpalatable necessity. Has DHS considered doing the same? Furthermore, has 

it done the analysis to determine in a corporate-wide—not independent operating division sense—what excess exists that could intra-departmentally be put 

to more productive use? 

(4) Reduce duplicative procurement of commercial services, especially professional services. An inventory of commercially-provided services by category can 

yield large opportunities for eliminating waste. In fact, the act of inventorying 

can itself put managers on warning for possible duplicative and unneeded expenditures. 

(5) Streamline levels of management review. Touched on earlier, this action has 

system-wide flow-down effects, particularly with regard to man-hours consumed. Fewer levels of approval mean fewer meetings, which occasion fewer 

pre-meetings, less audio-visual demands, fewer PowerPoints, and less travel. 

That is in addition to staff reductions and need for office space. 

(6) Reduce inventory to demand levels plus a safety buffer. Owning your own 

inventory outside of a safety stock is an obsolete and costly proposition in a 

globally-dispersed and digitally-connected commercial marketplace. Does DHS 

know how much of its common inventory is commercially available either 

through strategic sourcing or from the GSA schedule? 

(7) Rightsource maintenance, repair, and overhaul. Most commercial service 

providers outsource the MRO function to take advantage of the MRO’s econo-
39 

mies of scale and obviate the need to replace and upgrade repair facilities and 

equipment. 

(8) Intensely manage real property maintenance/establish a capital budget. Capital budgeting, which requires a long-term commitment of resources to effect the 

replacement of aging or worn-out equipment or infrastructure has never caught 

on with the annual budgeting cycle of the Federal Government. Congress is 

loath to give up its short-run appropriations hold on the purse strings. However, 

there is nothing illegal about approaching projects and planning from a capital 

budgeting perspective and many States and local jurisdictions have embraced 

the concept. The technique has the advantage of isolating the year-to-year variability of operational resource demands from the known replacement rates of 

long-term infrastructure and equipment life cycles. 

(9) Evaluate compensation, pay, and benefits. Pay-for-performance, pay banding, and other innovative alternatives to the civil service general schedule had 

their moment of ascendance in the 1990s, but were struck down by economic 

and other forces. However, in an era of declining Federal resources, the ‘‘war 

for talent’’ with the competitive private sector—where these plans have become 

the norm—argues for a relook at the Federal workforce’s compensation systems. 

DHS should press to reinstate its pilot program, but this time with greater 

transparency and workforce input. 

(10) Rightsource logistics, transportation, and sustainment. Next to the digital 

revolution, no other sector of the private economy has made the leaps in efficiency and effectiveness than the transportation logistics sector. Few major 

equipment and materiel manufacturers and many service-sector providers use 

third-party logistics (TPL) and many operate their fleets and equipment on a 

service rental agreement. 

(11) Rationalize and consolidate IT platforms and services. It is important to 

have the right data, but owning the means to that data has become less and 

less sensible. To keep abreast of rapid changes in the IT sector, it is better to 

specify a level of service and to let the marketplace provides solutions. Security 

is a consideration, but today’s security is more likely to be found in the cuttingedge technology of the independent IT providers than in legacy Government systems. 

3. REORGANIZATION AND CHANGE IS A PROCESS TO UNDERTAKE, NOT A PRESCRIPTION

TO SWALLOW

I have given you a list of management stratagems that, at one time or another, 

have worked in the private sector. I will admit that they are difficult to consider 

from a Government standpoint given the nature of our political system and the criteria on which we place success, that is, failure is not an option. However, many 

of the business processes and organizational structures which backstop our Nation’s 

security have their analogs in the private sector. It would be unwise, if not inopportune, not to emulate them where they apply. That has been BENS’ mantra since 

its founding over 30 years ago. 

As in any business, people are at the heart of any attempt at change. The leadership and the rank-and-file both have to be committed to improvement in the way 

Government business is done. Leadership, by definition has to set the tone and lead 

by commitment or no change is possible. They must assign clear responsibilities; 

then measure performance. Set discretionary spending targets; then enforce spending discipline. Define the goals; then make the changes transparent and equitable. 

Those affected by such change have responsibilities too. First they must define 

and embrace what success means for them and for the organization. They will see— 

sooner than management—what measures of effectiveness are working and which 

are not. They had better speak up or they jeopardize the likelihood of success. 

Today, the popular test of inclusion or participation, I guess, are the phrases ‘‘all 

in’’ or ‘‘lean in’’. Here’s my test of whether successful change is happening in an organization. 

It’s a set of questions that, when answered in an affirmative and confident manner, can predict the outcome. Why are you here? Why are you coming to work? 

What makes you think you are making a difference? If you are gone, what would 

happen to the organization? 

4. CONCLUSION

I recognize that my comments have not been as specific about how DHS can reduce its overlap in R&D and other areas as you may have expected and may receive 

from other witnesses. However, I believe the plate is bigger and the opportunities 

far broader to set the Department on the path to greater effectiveness and effi-
40 

ciency. Certainly 10 years’ worth of data should be sufficient to give a basic sense 

of where the frictions and the inadequacies lie. I am confident that with the help 

of this committee the Department can, in the face a certain resource restraints in 

the coming years, commit to structural and organizational changes in its overhead 

and infrastructure functions that can put it in the company of the best managed 

organizations—public or private—in the Nation. 

Thank you for having me. I am prepared to answer any questions you might have. 

Mr. DUNCAN. Dr. Stern, thank you for your testimony. 

The Chairman will now recognize Mr. Killough for his opening 

statement. 

STATEMENT OF CRAIG KILLOUGH, VICE PRESIDENT, ORGANIZATION MARKETS, PROJECT MANAGEMENT INSTITUTE 

Mr. KILLOUGH. Thank you, Mr. Chairman. 

Good morning Chairman Duncan, Ranking Members Barber and 

Thompson, and Members of the subcommittee. 

The Project Management Institute is the world’s largest project 

management association with members and credential holders 

numbering in excess of 700,000. 

The Project Management Institute maintains internationally recognized standards and professional credentials in project program 

and portfolio management that are recognized by the American National Standards Institute and the International Standards Organization. 

If I were to leave you today with three thoughts in the time that 

I have, they would be; First, organizations and Government bodies 

that use consistently applied program management standards and 

qualified program managers are more successful than organizations that don’t. 

Second, organizations that perform poorly in executing their programs expose themselves to significantly higher risk unnecessarily. 

Third, the entire Government would benefit from broad adoption 

of program management standards and the creation of a job classification and defined career path for program—— 

[Off mike.] 

Mr. KILLOUGH. PMI’s Pulse of the Profession Research identifies 

a key difference between high-performing organizations and organizations with low program management performance. 

That difference is that low-performing organizations risk 14 

times more money than the high performers. High-performing organizations demonstrate some key common characteristics. 

First characteristic is standardization. They utilize standard program management processes, practices, and procedures across the 

enterprise. Talent management; they recognize the critical value in 

acquiring, developing, and retaining talent. They have a defining 

career path for program managers and processes to develop program management competency. 

The strategic alignment. They align their program portfolio and 

prioritize that portfolio around the organization’s mission and ensure the management commitment to the aligned strategy. 

So why would these characteristics be important to the Department of Homeland Security? A recent GAO study from September 

2012 found that DHS leadership has authorized and continued to 

invest in major programs even though the vast majority of those 
41 

programs lack the fundamental processes and procedures necessary 

to manage risk and measure performance. 

In another example a GAO report completed at the request of 

Ranking Member Barber on the Customs and Border Patrol stated 

that Border Patrol has developed key elements of its 2012 to 2016 

strategic plan, but has not identified milestones and time frames 

for developing and implementing performance goals and measures 

in accordance with standard practices and program management. 

The Department of Homeland Security’s Program Accountability 

and Risk Management Office has taken a number of key steps to 

improve program management. We support these efforts and would 

encourage continued engagement with the program management 

community. 

PARM’s efforts should be bolstered by legislation. This committee 

approved House Resolution 3116 in 2012, which contained several 

important provisions to improve the program management workforce across the Department of Homeland Security. We would encourage the subcommittee restart that effort. 

In conclusion, I would like to recommend the following. Create 

job classification for project and program managers. A key factor in 

program failure is the lack of trained and experienced program 

managers. 

The phenomenon of the accidental program manager is far too 

common across Government agencies. PMI strongly encourages the 

Government-wide capability to hire program managers similar to 

what exists in OPM’s 2210 job series that in—information technology. 

Make the information technology program management career 

path Government-wide. The role of a program manager should not 

just come about by accident. According to our research, U.S. Government organizations frequently identify the causes of program 

failure as inexperienced or unqualified program managers. The inexperienced program manager is identified as a cause for failure in 

Government programs twice as often as the private sector. 

Finally, utilize program management standards in developing 

standard practices and processes. High-performing organizations 

recognize that standardization is the key to element and driving 

performance. 

The Department of Homeland Security has begun to take steps 

to implement better policies and they hope—we hope they will decide to align with the established standards. We would encourage 

the Department to adopt the practices identified by GAO report 

12–833 and make them a high priority. 

Thank you, Chairman Duncan, Ranking Member Barber, Ranking Member Thompson, for allowing me to represent the Project 

Management Institute. 

[The prepared statement of Mr. Killough follows:] 

PREPARED STATEMENT OF CRAIG KILLOUGH

APRIL 26, 2013 

Chairman Duncan, Ranking Member Barber, and Members of the subcommittee, 

my name is Craig Killough; and I am the vice president of organizations and markets for the Project Management Institute (PMI). I appreciate the opportunity to 
42 

participate in this important hearing and speak to the benefits organizations can 

derive from implementing best practices in project and program management. 

The Project Management Institute (PMI) is the world’s largest project management membership association, with more than 700,000 members and credential 

holders in 187 countries. Our headquarters are in Newtown Square, Pennsylvania 

where we were founded in 1969 as a not-for-profit organization. PMI seeks to advance the profession of project and program management through globally recognized standards and certifications, collaborative communities, an extensive research 

program, and professional development opportunities. The project management profession, broadly defined, encompasses project management, program management, 

and portfolio management. In the U.S. Government, the project management practitioner is typically considered a program manager and so I will use the term program 

management throughout the statement. I’d also like to recognize PMI’s 259 local 

chapters; we have a chapter in every State in the country, which play an essential 

role in organizing our members locally. 

In this testimony I will outline what PMI has learned about best practices and 

how organizations that value and implement best practices in project and program 

management are yielding significant value and gaining a competitive advantage. I 

will also make recommendations to improve program management and increase the 

use of best practices within the Department of Homeland Security. 

PMI-developed standards are the most widely-recognized standards in the profession, used by hundreds of leading organizations around the world. PMI’s Project 

Management Professional (PMP)® credential is the most important industry-recognized certification for project managers. The PMP® demonstrates that you have the 

experience, education, and competency to lead and direct projects. PMI’s research 

program has identified how program management delivers a competitive advantage, 

producing increased efficiencies, organizational mission alignment, stakeholder satisfaction, and improved decision making. The most successful organizations embrace 

project and program management is a strategic competency that enables organizations to deliver expected benefits and value through effective planning, organization, 

and risk mitigation. 

THE VALUE OF PROJECT MANAGEMENT

Effectively implementing program management best practices results in transparency and accountability. The most successful organizations have learned that 

creating a culture focused on program management is vital to achieving business 

success. An example of some of the organizations who are leaders in program management, and active members of the PMI Global Executive Council, include 

Accenture, BAE Systems, Boeing, Booz Allen Hamilton, Deloitte US, Hewlett-Packard, IBM Global Business Services, ICF International, Mayo Clinic, Microsoft, 

NASA, PriceWaterhouseCoopers, and Verizon Wireless. These organizations have 

embraced program management, use it to meet their strategic objectives and drive 

business success. Government programs have the opportunity to take advantage 

from what these companies have already learned—using global standards in program management is indispensable for business results. 

Congress typically focuses on acquisitions and IT when talking about the topic of 

program and project management. Certainly these are significant areas for program 

management, but the need for program management skills goes much further. Program managers play an integral role in all agencies at all levels. Program managers 

are asked to manage considerable efforts—often times without proper training, 

skills, experience, or authority. They are responsible for working with contractors, 

liaising between our Border Patrol agents, Customs officers, Coast Guard and executives—defining the requirements needed to fulfill a mission and their feedback and 

capability to measure and report information is critical to agency leadership understanding the progress of programs. The GAO has cited improving program management in its High-Risk. There is a clear need for improving the utilization of best 

practices in program management given the constraint on resources and the need 

to deliver results—on time and on budget. 

When organizations continue getting better at executing their projects and programs, they drive success. PMI’s annual research survey, Pulse of the ProfessionTM, 

shows that fewer than two-thirds of projects meet their goals and business intent 

and about 17 percent fail outright. 

According to the study, there is a strong link showing that effective program management reduces risk. Our Pulse of the Profession research shows that organizations 

who have invested in program management are seeing results. High-performing organizations are defined as having 90 percent of their projects meet original goals 

and business intent. Low-performing organizations see only 34 percent of projects 
43 

1 United States Government Accountability Office, ‘‘Homeland Security: DHS Requires More 

Disciplined Investment Management to Help Meet Mission Needs’’ GAO–12–833, p. 45 September 2012. 

meet original goals and business intent. In financial terms, on a billion-dollar 

project, low-performing organizations risk $280 million of a US$1 billion budget. 

High performers risk only US$20 million. This makes being a low performer 14 

times more likely to experience inefficiency and waste over the course of the program. 

What is the value of being a high performer? PMI’s 2013 Pulse of the ProfessionTM

research also looked specifically at Government programs. Our research showed 

Government programs risk approximately 10% more of their budget than the private sector. Our research indicates that to become high-performing, organizations 

and Government agencies must focus on three key factors for better results: 

• Standardization.—Standardization leads to the efficient use of resources. Highperforming organizations are almost three times more likely than low-performing organizations to use standardized practices throughout the organization, and have better program outcomes as a result. 

• Talent management.—High-performing organizations are significantly more 

likely than low performers to have a defined career path for program managers, 

have a process to develop program management competency and provide training on the use of program management tools and techniques. 

• Strategic alignment.—Aligning the portfolio around the organization’s mission 

and ensuring it is appropriately defined and resourced is a significant indicator 

of success. This aligns capabilities—ensuring that mature and experienced program managers are leading critical missions and given adequate flexibility. The 

results in significantly better outcomes, improved performance, and less waste. 

THE IMPORTANCE OF STANDARDS

As demonstrated by PMI’s Pulse data standards are crucial to the program management profession because they ensure that a basic program management framework, lexicon, and process are applied consistently. The value of this framework and 

lexicon applies equally to the private and public sector. In the private sector, it 

means an organization can work together around the world—understand a similar 

process and transfer knowledge between and among teams, develop best practices, 

and measure performance. In the public sector—this means effectively communicating with stakeholders, transferring knowledge, developing best practices, and 

measuring performance. 

PMI’s 13 standards for project, program, and portfolio management are the most 

widely recognized standards in the profession—and increasingly the model for program management in business and Government. They are developed and updated 

by thousands of PMI volunteers experts with experience in every type of project, and 

provide a common language for program management around the world. PMI standards, such as the PMBOK® Guide, with more than 4 million copies in circulation, 

have been successfully around the world. 

For the Department of Homeland Security, an organization with 22 entities, the 

use of standards is critical to ensure that decision makers and stakeholders are receiving information that allows for an effective portfolio and program level review. 

In addition, standards allow for best practices to be shared more easily across agency components. As an example, effective risk management has been an area of increased complexity and is critical to DHS’s mission. PMI has developed a practice 

standard for risk management, which, if utilized, consistently and across the agency, DHS executives will be able to accurately see how each component or entity is 

planning for risk with a common baseline, where shortfalls may occur, where risk 

management needs improvement. 

Why are these standards relevant to DHS and why should they be adopted? Just 

one example: A GAO study from September 2012 found, ‘‘DHS leadership has authorized and continued to invest in major acquisitions programs even though the 

vast majority of those programs lack foundational documents demonstrating the 

knowledge needed to help manage risks and measure performance.’’1 Utilizing a 

standard for risk management will help every entity within the Department meet 

these requirements and improve consistency. Standards when used consistently 

across an organization dramatically improve transparency, decision making, and 

performance. 

In another example, a GAO report requested by Ranking Member Barber on the 

Customs and Border Patrol, the GAO stated, ‘‘Border Patrol is developing key elements of its 2012–2016 Strategic Plan needed to define border security and the re-
44 

2 United States Government Accountability Office, ‘‘Border Patrol: Key Elements of New Strategic Plan Not Yet in Place to Inform Border Security Status and Resource Needs’’ GAO–13– 

25, highlights. 

sources necessary to achieve it, but has not identified milestones and time frames 

for developing and implementing performance goals and measures in accordance 

with standard practices in program management.’’2 The need for established standards is clear. 

In 2010, PMI conducted an analysis of successful Government programs: ‘‘Program Management 2010: A study of program management in the U.S. Federal Government’’. Program managers from a wide variety of Government sectors shared 

their insights on ‘‘success factors’’ and best practices for this study. We discovered 

how Government program leaders are able to achieve results. The most successful 

Government programs studied start with a firm grounding in the fundamentals: Experienced and well-trained program management practitioners (people), standardized program management practices (processes), and the tools to support both. They 

then learn to be better communicators, more agile, more collaborative, and more engaging. The most successful programs demonstrated that standard project and program management process and practice, along with effective management of risk 

were key elements of success. It is the combination of all these elements that has 

led to creating an organizational culture of program management, and has driven 

their successful programs. 

PMI’S RECOMMENDATIONS FOR THE DEPARTMENT OF HOMELAND SECURITY

PMI advocates for the profession of project management and improved program 

management within organizations and has found there are several areas where Government agencies could broadly improve their organizational maturity, become highperforming, and spend funds more efficiently. Implementation of PMI’s recommendations to Congress would make great progress toward establishing the 

framework needed to manage projects effectively. It is vital that Congress direct 

agencies to embrace project management standards that can be utilized by any 

agency on any program across the Federal Government. Because PMI’s broad-based 

standards are applicable for managing projects across industries and geographies, 

they are especially appropriate for use by the Federal Government. 

The Department of Homeland Security’s Program Accountability and Risk Management (PARM) Office has already taken a number of key steps to improve program management. We support its efforts to date and would encourage them to continue engaging with stakeholders and the program management community. 

PARM’s efforts could be bolstered by legislation, however. This committee approved 

a bill (H.R. 3116) in 2012, the Department of Homeland Security Authorization Act, 

which contained several important provisions to improve the program management 

workforce across the Department of Homeland Security. We would encourage the 

subcommittee and full committee to restart that effort and incorporate the findings 

of our latest Pulse of the Profession. 

In addition, we have several other recommendations for your consideration. 

(1) Create a job classification for project and program managers. 

A key factor of failure is the lack of an identified, trained, and supported program 

manager. The phenomenon of the ‘‘accidental’’ program manager is far too common 

across Government agencies. PMI would strongly encourage a Government-wide capability to hire program managers similar to what exists in OPM’s 2210 Job Series 

for IT. Identifying this individual is also critical. Each program should have a dedicated program manager who is responsible for implementing proven success factors 

and ensuring results. GAO has also identified this as a critical need, given there 

are staffing shortfalls, this step would help the Department identify and address its 

talent needs. This requirement will also increase transparency and provides additional accountability and should be the focus of every Government program with acknowledgement from agency executives. 

(2) Scale IT program management career path Government-wide. 

The role of a program manager should not just come about by accident. Recognizing the positive effect that can be obtained by having a strong program manager 

and building the necessary skill sets is critical. This is something successful organizations have recognized. According to PMI’s research, U.S. Government organizations themselves identify the causes of program failure to include: Changing priorities, poor risk management, inadequate communications, and an inexperienced program manager. In fact, Government agencies identified an inexperienced program 
45 

manager as a cause for failure almost twice as often as organizations in the private 

sector. 

It is essential to retain and support talented program managers by providing defined career ladders and options. Recruiting and retaining highly-performing personnel is a particular challenge in the Federal Government. Scaling previously successful reform plans across agencies is logical and makes good sense. The model utilized by Rep. Issa and Rep. Connolly in the Federal Information Technology Acquisition Reform Act; H.R. 1232, could provide an example. This initiative will reduce 

duplication significantly and will improve efficiency and program success rates, 

thereby improving the expenditure of taxpayer funds and improving morale at agencies. 

(3) Utilize program management standards in developing standard practices and 

processes. 

Organizations that value program management understand that the contributions 

of professional program managers using standardized practices increase project success rates, create efficiencies, and improve alignment with organizational strategies. 

Standardization leads to an efficient use of resources, which allows more time and 

resources to focus on leading, innovating, and delivering products and services—and 

ultimately leads to a competitive advantage. High-performing organizations are almost three times more likely than low-performing organizations (36 percent vs. 13 

percent) to use standardized practices throughout the organization, and have better 

project outcomes as a result. Organizations that recognize the importance of project 

management are driven by expected and tangible results: On time, on budget, within scope, and in accordance with project requirements. 

PMI standards are the guidelines against which individuals and organizations can 

assess their existing project management capabilities and provide the benchmark 

for them to build and mature their existing proficiency. They provide the foundation 

for developing and implementing the superior practice of program management. 

A number of GAO’s recommendations refer to the need for program management 

standards and their application. The Department has begun to take steps to implement better policies and we hope they will continue to align with established standards, which have demonstrated success in the private sector. Further we would encourage the Department to keep the practices identified by GAO in report GAO–12– 

833, as key practices, for program and portfolio management a high priority. Further we would encourage the Congress to ensure these recommendations are being 

followed. 
46 

(4) Support integrated program teams. 

Program managers should be working with their counterparts across the acquisitions workforce and with their counterparts in the private sector. A program stands 

a greater likelihood of being successful if everyone understands the importance of 

the mission, the business strategy, and help ensuring the programs are delivering 

the intended results. Integrated teams will prevent silos and facilitate maturing program managers. This should also include program managers remaining with their 

programs until a major milestone is reached. 

CONCLUSION

PMI will continue to work with the Congress and the administration to improve 

efficiency in the Federal Government. We would encourage all of the Members of 

this committee to join the Government Efficiency Caucus, to engage in regular dialog and keep up-to-date on the latest in effective best practices in program management. We believe increasing Government efficiency through improving the use of 

project and program management standards will save taxpayer funds and improve 

delivery of services. 

The American people expect results from their Government particularly in these 

fiscally challenging times. Having the right tools and processes alone will not ensure 

success. But by bringing together tangible best practices with the more intangible 

‘‘culture of program management’’ is what has set successful organizations apart 

from the rest. We believe effective use of program management will make those results possible across the U.S. Government. 

Again, thank you Chairman Duncan, Ranking Member Barber for the opportunity 

to testify at this important hearing. I will be pleased to answer any questions you 

or Members of the subcommittee may have. 

Mr. DUNCAN. Thank you, Mr. Killough. 

The Chairman will now recognize Dr. Willis for his testimony. 

STATEMENT OF HENRY H. WILLIS, PH.D., DIRECTOR, RAND 

HOMELAND SECURITY AND DEFENSE CENTER 

Mr. WILLIS. Thank you and good morning, Chairman Duncan, 

Ranking Member Barber, Ranking Member Thompson, and other 

distinguished Members of the subcommittee. 

The recent GAO report on fragmentation, overlap, and duplication is the latest critique of DHS effectiveness. The report cites inefficiencies across a range of DHS activities. The waste in programs like these is a symptom of a larger issue at DHS. 

DHS programs too frequently lack strategic guidance and are not 

adequately evaluated. Strengthening the Department strategic 

planning and program management is essential if DHS is to implement the Nation’s desired capabilities across its full set of missions. 

DHS currently has efforts underway that are consistent with the 

goal of integrating Department-wide strategic planning into decisions about priorities and budgets. These initiatives point the Department in the right direction, but success is not assured unless 

Congress and DHS work together to address three related issues. 

First, implementing greater transparency for strategic planning, 

program implementation, and evaluation efforts. Second, developing a stable well-resourced cadre of a personnel within DHS to 

conduct analysis and support decisions. Third, streamlining Congressional oversight of the Department’s activities. 

First, let me turn to transparency. Arguably, the most important 

way DHS can improve strategic planning is by increasing the 

transparency of the supporting analysis done by and for the Department. When analysis is made available for all to view, its quality improves, because data, assumptions, and logics are examined 

and policy debates can then become about the facts. 
47 

When data and analysis is subject to review and open to deliberations another result is innovative new ways to solve problems. 

Despite its promise, in practice transparency is stunted by two 

myths. 

Myth No. 1: The first myth is that transparency of DHS analysis 

will compromise the security or privacy. Certainly concerns about 

security and privacy warrant careful attention; however, other organizations have developed procedures that allow for review of 

analysis regarding highly-classified issues or have found that significant analysis of National security topics can be conducted outside of the restrictions of classification. 

In fact, shielding analysis from review comes at great cost. 

Greater access to methods, data, and analysis help bring the combined resources of our Nation’s universities to bear on homeland 

security challenges and raise the chances of stronger program design and less duplication of effort. 

Myth No. 2: The second myth that stunts the practice of transparency is the Government can’t explore new ideas under a microscope. The origin of this myth rests in the belief that Government 

officials will be wary about exploring new policy ideas unless they 

are provided a shelter from the perceived penalties of public review 

and critique of proposed new ideas in their underpinning analysis. 

In practice, there is some truth to these concerns, but critique in 

advance that leads to strengthened planning is nearly always preferable to the costs of a failure later. Decisions shaped by stronger 

strategic analysis are better-positioned to weather critique and ultimately to succeed. 

Thus DHS will be better served by increasing transparency. The 

expectation should be that the analysis will be shared as a rule 

rather than as an exception. If this view is adopted, DHS could 

consistently take three steps to improve transparency of strategic 

planning. 

First, subject analysis and analytic methods to independent peer 

review. Second, develop procedures for making data sets available 

for analysis across DHS and within academia. 

Third, implement processes to share data and analysis as part of 

deliberations about strategies, policies, and regulations with partners across Federal and local governments, the private sector, and 

the public. 

Now let me turn to analytic capabilities to support strategic 

planning. To succeed in conducting strategic planning and implementing the results, DHS must have analytic capabilities within 

the Department. This capability must exist in support of the Secretary so that it is independent of the vested interests of any component agencies. 

Sustaining this internal analytic capability requires more than 

Congress ensuring stable and adequate funding. It also requires 

that DHS create and foster career paths across the Department 

that allow these people opportunity for growth. 

Finally, regarding my third point about Congressional oversight. 

The purpose of strategic planning is to ensure that DHS uses resources provided by Congress in a way that reflects National priorities. 
48 

1The opinions and conclusions expressed in this testimony are the author’s alone and should 

not be interpreted as representing those of RAND or any of the sponsors of its research. This 

product is part of the RAND Corporation testimony series. RAND testimonies record testimony 

presented by RAND associates to Federal, State, or local legislative committees; Governmentappointed commissions and panels; and private review and oversight bodies. The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions 

that address the challenges facing the public and private sectors around the world. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. 2This testimony is available for free download at http://www.rand.org/pubs/testimonies/ 

CT386.html. 3These missions were most clearly outlined in two DHS documents: The Quadrennial Homeland Security Review (released in 2010) and the Department of Homeland Security Strategic 

Plan Fiscal Years 2012–2016 (released in 2012). 4GAO (2013). 2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and 

Duplication and Achieve Other Financial Benefits, U.S. Government Accountability Office, 

Washington, DC. 5 As an example, consider observations about DHS acquisition management provided by Jeffrey Drezner and Andrew Morral in Reducing the Cost and Risk of Major Acquisitions at the 

Department of Homeland Security (2013), PE–105, RAND Corporation, Santa Monica, CA. 

The current Congressional oversight structure creates challenges 

to efficient management, but consistent and early use of transparent strategic planning formed by analysis will make it easier for 

Congress and DHS to together implement effective homeland security policies. 

In summary, DHS’s first decade was clearly one marked with 

challenges, mistakes, and learning. If DHS is to continue maturing, 

both the Department and Congress should work together to institute a new approach to greater use of integrated strategic planning 

that incorporates greater reliance on transparent analysis, 

strengthening the Department’s internal analytic capabilities, and 

to the extent possible simplify Congressional oversight of DHS. 

Thank you very much. I am happy to answer any questions that 

you might have. 

[The prepared statement of Mr. Willis follows:] 

PREPARED STATEMENT OF HENRY H. WILLIS 1

APRIL 26, 2013 

STRENGTHENING STRATEGIC PLANNING AND MANAGEMENT AT DHS 2

Congress has given the Department of Homeland Security (DHS) a complex set 

of five missions to meet the evolving challenges faced by our country:3

• Prevent terrorism and enhance security; 

• Secure and manage borders; 

• Enforce and administer immigration laws; 

• Safeguard and secure cyberspace; 

• Ensure resilience to disasters. 

The recent Government Accountability Organization (GAO) report on Government 

fragmentation, overlap, and duplication is the latest critique to question the Department’s effectiveness and efficiency in implementing these missions.4 The report cites 

inefficiencies and waste across a range of DHS activities, such as airline passenger 

and baggage screening, border security, and preparedness grant programs. 

Though troubling in a period where budgets are lean, the waste in programs like 

these is a symptom of a larger problem at DHS. DHS programs too frequently lack 

strategic guidance, do not result from implementation that reflects choices and priorities to achieve desired outcomes, and suffer inadequate evaluation.5

Strengthening the Department’s strategic planning and program management is 

essential if DHS is to implement effective, integrated solutions that enable the Nation’s desired capabilities across the five DHS missions. DHS programs should be 

supported with early and thorough strategic planning that outlines desired outcomes. Resources should be directed toward activities that most effectively and efficiently achieve these desired outcomes. Programs should be subjected to evaluation 

to ensure progress is made toward those outcomes or to guide adjustments to the 

program. 
49 

6Secretary Janet Napolitano (2013, February 26). The Evolution and Future of Homeland Security, Third Annual Address on the State of Homeland Security, Washington, DC. 7For more details, refer to Hurricane Sandy: Timeline, available on-line at http:// 

www.fema.gov/hurricane-sandy-timeline as of April 21, 2013. 8For further discussion refer to Treverton, Gregory F. (2009). Addressing ‘‘Complexities’’ in 

Homeland Security. Center for Asymmetric Threat Studies, The Swedish National Defence College, Elanders, Va ̋llingby. 

While the Department has established goals to put processes in place to implement the required strategic planning and management capabilities, success depends 

on Congress and DHS working together to: 

• implement greater transparency for strategic planning, program implementation, and evaluation efforts conducted by and for the Department; 

• develop a stable, well-resourced cadre of personnel within DHS to conduct analysis and support decision making; 

• streamline Congressional oversight of the Department’s activities. 

A brief review of the DHS’s progress in its first 10 years and challenges ahead 

provide insight into why these steps are critical and what is involved in completing 

them. 

CONFRONTING FUTURE HOMELAND SECURITY CHALLENGES

On March 1, 2003, 22 independent agencies joined together to form the Department of Homeland Security as the newest Cabinet-level agency.6 Now, 10 years 

later and in the wake of last week’s tragedies in Boston, it is prudent to assess the 

status of Department and consider what the most pressing steps should be to continue the Department’s progress. 

Arguably the Department’s most notable organizational accomplishment has been 

developing the ability to respond as a unified, coordinated organization, as exemplified in the response to Hurricane Sandy. In October and November of 2012, DHS:7

• coordinated emergency plans with partners at all levels of government; 

• deployed close to 10,000 personnel from across FEMA, the Transportation Security Administration, United States Citizenship and Immigration Services, Coast 

Guard, Secret Service, Customs and Border Protection, Immigration and Customs Enforcement, and DHS Headquarters; 

• kept private-sector partners connected and informed through the National Business Emergency Operations Center daily calls; 

• distributed more than $700 million to the more than 400,000 disaster survivors 

from Connecticut, New York, and New Jersey who applied for individual assistance support. 

The Department’s integrated response capabilities provide a foundation for keeping the Nation safe and secure, but the strategic environment within which the Department is operating remains filled with complex challenges. For example, 

• Hurricane Sandy reminded us that old assumptions about where and how frequently natural disasters occur may no longer be valid, and indeed place critical 

infrastructure at risk. 

• As Congress debates immigration reform, the Department may find itself overhauling border security operations, workplace enforcement, and administration 

of visa policies. 

• The more we learn about cyber threats to financial networks, control system 

software, and intellectual property, the more it becomes evident that we need 

new strategy, doctrine, and standards for securing cyberspace. 

• Revelations about the motivations behind the terrorist attacks in Boston underscore the importance of countering the variety of threats from home-grown 

radicalization, transnational crime, and terrorism networks. 

• While the global community reacts to nuclear ambitions of Iran and North 

Korea, at home we must consider how to protect the country from nuclear terrorism in a period of possible expanded proliferation. 

When the challenges are great and resources limited, good strategic planning is 

critically important. Three factors make assessing the risks from these many 

sources difficult and strategic planning all the more essential to DHS’s ability to fulfill its multiple missions. 

1. The threats themselves are poorly understood.—Consider for example, how 

much will the sea level rise? How might nuclear terrorism occur? Or, what are 

the threats to the United States in the cyber domain and what are their associated risks? The variety and ambiguity of threats to consider requires careful 

scoping of scenarios and data-driven analysis to define and assess the range of 

conditions the Department must be prepared to address.8
50 

9 A description of how these issues were managed in Louisiana is available in the Lousiana’s 

2012 Coastal Master Plan, produced by the Lousiana Coastal Protection and Restoration Authority, Baton Rouge, LA. 10For more discussion see Chandra A., J. Acosta, S. Stern, L. Uscher-Pines, M.V. Williams, 

D. Yeung, J. Garnett, L.S. Meredith (2011). Building Community Resilience to Disasters: A Way 

Forward to Enhance National Security, TR–915–DHHS, RAND Corporation, Santa Monica, CA. 11For a discussion of identifying objectives and performance measures refer to Willis H.H., 

J.B. Predd, P.K. Davis, W. Brown (2010). Measuring the Effectiveness of Border Security Between 

Ports-of-Entry, TR837–DHS, RAND Corporation, Santa Monica, CA. 12See Homeland Security: DHS Requires More Disciplined Investment Management to Help 

Meet Mission Needs (2012, September 18). GAO–12–833, Washington, DC. 

2. The consequences of these threats and means to mitigate or prevent them affect 

the Nation in many ways.—For example, Hurricanes Katrina and Rita killed 

people and destroyed property. Levees can reduce both of these risks. But, levees also exacerbate poor sediment management and thus can harm unprotected 

farmland and fisheries in nearby areas.9 Furthermore, failure to build community resilience can deepen and prolong the economic disruptions that follow disasters.10 Solutions must balance efforts to address each of these outcomes. 

3. Solutions require multiple capabilities and thus integrated planning among 

multiple DHS component agencies.—The desired capabilities to protect the Nation against a diversity of threats do not reside in any single organization within DHS. Thus, choices must be made about how to allocate resources across 

DHS to most effectively solve problems of National concern. 

Overcoming these challenges to implement solutions to complex threats requires 

setting priorities about which threats are most concerning, which outcomes are most 

important, and how resources can be best used to implement the desired balance 

across both threats and outcomes. For example, preventing illegal migration requires choices among expenditures on fences and barriers; air, sea, and land surveillance; security at ports of entry; workplace enforcement; and administering immigration and visa policies. These choices will certainly lead to shifting of resources 

among component agencies. In doing so, DHS will simultaneously have to ensure 

that these resource choices do not unduly harm other enduring missions, such as 

helping communities recover from floods or other disasters, collecting duties on imports, or protecting the President of the United States.11

Too frequently, important decisions at DHS are not made with the benefit of rigorous analysis. For example, a GAO review of 71 DHS major acquisition programs 

documented that 88 percent proceeded past acquisition review of the DHS Investment Review Board without the documented planning analyses required by DHS 

Policy.12

In summary, meeting complex security challenges in the future requires more 

than just unified action from DHS. For the Department to continue its growth it 

must complement the proven ability to respond as a unified organization with the 

ability to develop integrated plans that set priorities, direct resources to programs 

and activities to achieve outcomes consistent with these priorities, and conduct evaluations to ensure these outcomes are realized. 

KEYS TO IMPLEMENTING INTEGRATED STRATEGIC PLANNING AT DHS

DHS currently has efforts underway that are consistent with the goal of developing capabilities to integrate Department-wide strategic planning into decision 

making about priorities and budgets. Among these are both the implementation of 

the Integrated Investment Life Cycle Model (known as the IILCM) to improve management of acquisition across the Department as well as the on-going analysis to 

support the Department’s second Quadrennial Homeland Security Review, due to 

Congress on December 31, 2013. While these initiatives point the Department in the 

right direction, success is not assured unless DHS addresses three related issues: 

• Increasing transparency surrounding strategic planning and analysis; 

• Strengthening internal analytic capabilities to support strategic planning; 

• Simplifying Congressional oversight. 

INCREASING TRANSPARENCY SURROUNDING STRATEGIC PLANNING AND ANALYSIS

Arguably the most important way DHS could improve strategic planning is by increasing the transparency that surrounds the supporting analysis done by and for 

the Department. Naturally, efforts to increase transparency must pay close attention to protecting information that is security-sensitive, could reveal information 

that could favor some firms over others in the Government acquisition process, or 

could risk revealing personally identifiable information. As will be described subse-
51 

13 Alicia Caldwell (2011, May 17). DHS Most Overseen Department, Associated Press. 14 Jessica Zuckerman (2012, September 10). Politics Over Security: Homeland Security Congressional Oversight In Dire Need of Reform, Heritage Foundation. 

quently, there is a great deal in the way of analysis that can be done within these 

constraints. 

However, adopting a position of greater transparency involves adopting the expectation that analysis will be shared as a rule rather than as an exception. If this 

goal is adopted, there are several simple actions DHS could take consistently to improve the transparency of its strategic planning, including: 

• subjecting analysis and analytic methods to independent peer review; 

• developing procedures for making data sets available for analysis across DHS 

and within academia; 

• implementing processes to use analysis within deliberations about strategies, 

policies, and regulations with partners across Federal and local government 

(such meetings already occur regularly) and also to stakeholders among the private sector and public (which can be done more regularly). 

Since greater transparency is key to strengthening strategic planning and analysis, I’ll return to this topic later in my testimony to explain its benefits, as well 

as the myths that prevent more widespread adoption. 

STRENGTHENING INTERNAL ANALYTIC CAPABILITIES TO SUPPORT STRATEGIC PLANNING

To succeed in conducting strategic planning and implementing the results, DHS 

must have analytic capabilities within the Department. To provide an integrated 

view for the Department, analytic capability must exist in support of the Secretary. 

To support leadership decisionmaking, the capability must have stable resources so 

that analysis can draw on knowledge of missions, datasets, and the analytic agenda 

that has developed over the recent past. 

Currently, strategic planning and analysis is being conducted across many parts 

of DHS, with a substantial portion of activity residing within the component agencies. Analytic capability within the components is necessary and appropriate, but is 

not a substitute for support to the Secretary. Integrated planning at the Department 

level requires analysis that is independent of the interests of any one component. 

Analytic capability in support of the Secretary has historically resided in several 

places but has never been stable. For example, within the DHS Office of Policy, the 

Office of Strategy, Planning, Analysis, and Risk has responsibilities for both developing strategic planning processes and conducting analysis decision making by DHS 

leadership. Yet, another place where analytic capability has existed within DHS is 

the Division of Program Analysis and Evaluation with the Office of the Chief Financial Officer. Similar complementary capabilities have existed or could be developed 

within the Management Directorate or Science and Technology Directorate. In all 

cases, these analytic cells have experienced periods of high turnover or possible reductions in funding when DHS is faced with pressure to direct more effort to operations. 

As a result, it is clear that sustained internal analytic capability requires more 

than Congress ensuring stable and adequate funding. It also requires that DHS create and foster analytic career paths across DHS that allow individuals opportunity 

for growth. Two strategies could support development of such careers. First, increased transparency of analysis could increase interest among analysts in working 

on DHS strategic planning. Second, deliberate personnel development strategies 

could include cross-Department assignments. It would be these assignments that 

could allow analysts to gain first-hand experiences with missions across the various 

component agencies that later helps them answer questions posed by DHS leadership and Congress. 

SIMPLIFYING CONGRESSIONAL OVERSIGHT

The purpose of strategic planning is to ensure that DHS uses resources provided 

by Congress in a way that reflects National priorities. The current oversight structure that DHS must operate within denies the Department a clear voice from Congress about what those priorities should be. 

The abundant Congressional oversight of the Department has been widely cited 

yet remains an obstacle to efficient management. As you know, DHS answers to 108 

Congressional committees and subcommittees, about four times as many as the Departments of State and Justice combined.13 In contrast, the Department of Defense 

reports to about one-third the number of committees for a budget that is approximately ten times larger than DHS’s.14 This oversight leads to thousands of requests 
52 

15 Bipartisan Policy Center (2011). Tenth Anniversary Report Card: The Status of the 9/11 

Commission Recommendations, Washington, DC. 

for briefings and hundreds of requests for testimony each year, as well as multiple 

perspectives on what issues before DHS are the most pressing.15

The prospect of asking some committees to cede oversight of DHS to other committees raises difficult political questions. However, these discussions are more than 

justified at this 10-year point in the Department’s existence, and could yield potential benefits. Consolidating jurisdiction over the Department into fewer committees 

would make it easier for the Department to work with Congress to develop priorities 

and respond quickly and efficiently to oversight requests. 

HOW GREATER TRANSPARENCY WILL IMPROVE DHS STRATEGIC PLANNING

GAO and the National Academies are two among many organizations that have 

identified possible areas where DHS suffers fragmentation or inefficiency. Often, the 

critiques stem from incomplete or missing analysis. In turn, these critiques lead to 

additional oversight and requests, and requests for information from Congress. 

When responses to these requests do not meet the satisfaction of Congress, the result is erosion of confidence in the management of DHS programs. This, in turn, 

prompts additional reviews and the cycle of criticism, requests, and unmet expectations continues. Increased transparency can help DHS break this cycle. 

When analysis is made available, the analysis promotes more complete deliberations about what the facts are and the subsequent use of those facts in decision 

making. When analysis is subjected to review, its quality improves because data, assumptions, and logic are evaluated under a wider set of considerations. When data 

and analysis are open to deliberations, the result can be new ideas and innovative 

approaches to solving problems—a natural result when more people are aware of 

problems and have access to facts and figures concerning those problems. 

Despite the promise of transparency, in practice implementation is stunted by two 

myths. 

MYTH NO. 1: ‘‘TRANSPARENCY OF DHS ANALYSIS WILL COMPROMISE SECURITY OR

PRIVACY’’ 

Certainly concerns about security and privacy warrant careful attention. However, 

other organizations within the National security and intelligence community have 

developed procedures and policies that allow for transparency of highly-classified 

material. The Military Operations Research Society was established to provide defense analysts an opportunity to share and discuss classified work. The National 

Academy of Sciences, the JASON advisory group, the Defense Science Board, and 

RAND Corporation have found that significant analysis of National security topics 

can be conducted outside of restrictions of classification. And, when security concerns dictate greater limitations, organizations like these have successfully implemented peer-review processes for classified studies. 

Furthermore, even when specific estimates are classified, often the methodology, 

assumptions, and other general features of the problem can be discussed and debated in unclassified settings. In some cases, data can be made available in ways 

the limit the risk of disclosure of sensitive or personally identifiable information, so 

that others across and outside of the Department have the opportunity to study the 

problems that DHS is trying to solve. In this realm, it is critical that research adheres strictly to policies and procedures to protect sensitive information and the 

rights of human subjects in a research setting. However, approaches used in topics 

related to the study of education, social security, and health care all provide potential analogies. 

These steps could bring the combined resources of our Nation’s universities to 

bear on homeland security planning challenges. Beyond adding some of the best 

minds in the Nation to the cadre of analysts working on these issues within DHS, 

increased dissemination of planning analyses is likely to foster a new generation of 

students with the knowledge and skills needed to enter the DHS workforce and offer 

important new innovations to its strategic plans and other analytic products. 

MYTH NO. 2: ‘‘GOVERNMENT CAN’T TEST NEW IDEAS UNDER A MICROSCOPE’’ 

The origin of this myth rests in the belief that the combination of public interest, 

vested interests, and costs of complying with requests for oversight together lead 

policy makers to be conservative about exploring new policy ideas and proposals 

(and thus not innovate) unless they are provided a shelter from the perceived pen-
53 

alties of this type of review. Agencies claim that increased transparency would remove this shelter, and this inhibits innovation. 

In practice, there is some truth to these concerns. However, consider the alternative: Purported innovation without the benefit of fresh ideas and constructive criticism of new proposals. Transparency can engender both fresh ideas and constructive criticism, and new ideas that are born from such a process are arguably betterpositioned to weather critiques. Thus, DHS would be better served by increased 

transparency. 

SUMMARY

Clearly, DHS’s first decade was one marked with challenges, mistakes, and 

growth. The challenges to the Nation that the Department is responsible for addressing in the near future are strikingly complex. Moreover, as the recent GAO report on fragmentation and duplication indicates, the Department has plenty of room 

to continue maturing as an organization. If DHS is to step up to these challenges, 

both the Department and Congress should work together to institute a new approach to greater use of integrated strategic planning that incorporates strengthening the Department’s internal analytic capabilities, greater transparency surrounding analysis and the data supporting it, and (to the extent possible) simplified 

Congressional oversight of DHS. 

Mr. DUNCAN. I want to thank the witnesses for your opening testimony. 

I now recognize myself for 5 minutes for questions. 

I want to start off by saying we have heard words like flowcharts, redundancy, strategic planning, and coming from the private sector, that is what business does. 

They set an organizational model, they strategically plan for the 

future based on incomes, expenses, and anticipated revenue and future expenses. Strategic planning is important but also the flexibility with the strategic planning when you see something that 

doesn’t work, incomes fall short, expenses, to make adjustments on 

the fly so to speak as business operates and so I appreciate that 

the private sector input here and vision and I guess your opinions. 

I want to start off with the Government side of it to Ms. Berrick 

because of the presence of multiple information sharing entities can 

have both favorable and unfavorable consequences for how effectively Federal agencies respond to homeland security threats. 

With what happened last week in Boston, the terrible tragedy 

there, let me say law enforcement responded beautifully and we 

were able to find the bombers and I appreciate that, but I think 

there are lessons to be learned especially as we look back 10 years 

for homeland security being stood up and we start to understand 

that the reason DHS was created; why all of these agencies, 22 of 

which were brought up under one umbrella, and certain centers 

like National Counterterrorism Center set up as the hub in the 

wheel. 

We start understanding and realizing that maybe the information sharing isn’t going like it should or maybe we are starting to 

see some stovepipe dynamics that were revealed back in 2001 reemerge. 

So I guess my question for you is: What effects, either positive 

or negative, does overlap of information collection and analysis 

among these five entities listed in the GAO’s report have on DHS’s 

ability to execute its missions specifically on information sharing in 

light of what happened last week, Ms. Berrick? 

Ms. BERRICK. Thank you. Thank you, Mr. Chairman. 
54 

As you mentioned, there can be significant benefits of having 

that overlap, as intelligence is never perfect. So having—getting 

that information from more sources than one can be very beneficial. 

Our point has always been that, when doing that, coordination 

and sharing of best practices is really critical. So for example I 

mentioned we looked at eight urban areas. We found 37 of these 

information-sharing entities and there was overlap among 34 of 

those. 

While these entities had generally good working relationships, 

there was no real emphasis on coordination of activities so that 

they weren’t overlapping one another. And as a result, some of the 

customers for these entities would complain about getting multiple 

analytical products that covered the same points. 

They thought it, in some cases, was wasting their time because 

they were getting the same information from many sources. So first 

of all, it is important to coordinate. 

Second, in these situations it is really important to share best 

practices. Some of these entities worked out very good arrangements where they co-located—some of the entities were co-located—that really cut down on unnecessary duplication. 

In other cases, governance boards were established where different entities were members of that, and that helped. So while 

some overlap, as you mentioned, can be very good, it really makes 

coordination in the sharing of best practices critical. 

I also wanted to mention GAO has designated as early as 2005, 

and it is still on our high-risk list, the sharing of law enforcement 

and intelligence information as a high-risk area Government-wide. 

Where we have seen the most progress is in the establishment 

of a governance structure to oversee information-sharing initiatives. We have seen less progress at the Department level and actually coordinating and leveraging each other’s initiatives and also 

in coming up with good technology solutions to facilitate the sharing of information. 

Mr. DUNCAN. Let me just follow up on that; and while I did not 

plan on it, but you hit on something. You think the different IT 

systems that we are operating on hamper that effort of information 

sharing and do we see some territorial disputes or maybe ownership issues of owning the data and not really wanting the other 

agencies to be able to have access? 

I am talking about security data. I am not talking about just 

processes and systems, but I guess if a law enforcement agency has 

a suspect, they have compiled a file on that suspect, I would say 

that it would benefit law enforcement across the spectrum to all 

have that information versus what I think we are seeing is some 

sort of proprietary ownership of that information and not wanting 

to share that. I am afraid that that is what we are going to discover as we look back on last week. Is there any validity to that? 

Ms. BERRICK. Generally speaking, we have identified the commonality or lack of for IT systems to be a challenge, and we in fact, 

made a recommendation to the program manager for the information-sharing environment to establish an enterprise architecture 

through which the Department—there are five key departments 
55 

that have key information-sharing responsibilities—can be a part 

of so that they can develop common IT solutions. 

Of those five departments, only two have developed implementing plans to move forward within that architecture. The other 

three are still working on it. So it is recognized that it is a problem. 

There are efforts underway to address it but the Government isn’t 

there yet. 

Mr. DUNCAN. I think the subcommittee will probably revisit this 

IT issue in light of what happened last week. 

I just want to ask one final question before I turn it over, but 

Ms. Richards, we had talked about CBP as a shift change happens, 

CBP officers down maybe in Arizona or along the border, having 

to trade radios out between the car windows between shift changes. 

I think Inspector General Edwards recently confirmed in a letter—that Department-wide radio interoperability is one of his officers’ highest-priority, short-term recommendations and having seen 

what South Carolina did after 9/11 and in the post-Hurricane Hugo 

days but then after 9/11 more than anything, is that our law enforcement; local, Sheriff’s Department, Chief of the Police, and 

EMS services along with the National Guard, Highway Patrol at 

the State level—they all couldn’t communicate. 

So grants were issued and money was spent to upgrade to a 500 

megahertz system so everybody at certain times could be on the 

same frequency to listen what is going on, communicate effectively. 

I would like for you just to address that interoperability aspect, but also address the fact that we have got $60 billion budget and 

agents are having to hand radios out through the car window for 

the next shift so that they will have the radio system that is operable. That alarms me. So if you could address that for me. 

Ms. RICHARDS. Thank you, Mr. Chairman. 

There are two issues that you are talking about. One is an interoperability where the radios that they have should be programmed 

so that they can access this common channel and the radio operator should be aware of the common channel and how to get to it. 

What our audit found was that most of the radios were not properly programmed although they could have been and that most of 

the radio users were simply unaware of the common channel. 

We recommended that the Department put out policies and procedures to make sure that everyone was aware and could get to 

this common channel as a workable solution and most importantly 

that the Department put in a strong governance structure to ensure that all of the components were in line with this common goal 

of achieving interoperability. 

The Department is working on putting out its policies and procedures. The Department did not agree with our recommendation for 

a governance structure. They have a governance structure in place 

that is based on memorandums of agreement among the various 

components and they believe that that is sufficient. 

As to the question of handing radios off at the end of a shift, as 

part of a follow-on to our interoperable communications audit we 

started an audit looking at the inventory of the communications assets. 

We have finished our fieldwork and we are about to deliver our 

draft report to the Department and hope to have the report to you 
56 

within the next quarter. I think that would answer some of your 

questions on that issue. Because we haven’t finished the work, I 

can’t address it today. 

Mr. DUNCAN. Thank you so much. 

I would ask that y’all would also with interoperability and I am 

sure we will review Boston events and interoperability in communication with regard to that as well. 

Ms. RICHARDS. Yes, sir. 

Mr. DUNCAN. Okay. Thank you so much. 

I will yield to the Ranking Member of the committee, Mr. Barber, 

for his questions. 

Mr. BARBER. Well, thank you, Mr. Chairman. I hadn’t planned 

on asking this question but in light of what you just said, I really 

feel I must and that has to do with the interoperability problem. 

Let me give you a very specific example and I don’t think much 

has changed. When the Ranger Rob Krentz was killed 3 years ago, 

we believe by a cartel member, one of the biggest problems was 

interoperability. 

When I drove down there with Congresswoman Giffords to meet 

with the ranchers shortly after his death we learned very quickly 

that we were trying to reach the Secretary and we kept losing signal throughout the area. 

In this rugged area of the Southwest Border, this is a huge problem. In talking to agents on the ground it is still a problem 3 years 

later. It not only is to the advantage of the civilians but certainly 

to our Border Patrol agents that we fix this problem. 

So I look forward to report and unlike your previous report on 

this matter, I hope the Department will seriously consider implementing your recommendations. This is a huge issue. 

Let me turn to a general theme. As I have listened to the witnesses, there are certain ideas that continue to come up, and I 

want to ask about how we get them done. Having skilled personnel 

doing the right job with the right skill set in the right evaluation 

processes. 

You know, sometimes we promote people who are really good at 

what they do on the field but then they are supervisory, they don’t 

know how to do it. You talked about transparency and planning. 

You talked about data-driven planning and evaluation processes. 

All of these things are pretty much across the board a consensus 

I think amongst the witnesses this morning. I am interested in 

your ideas about not just what to do but how we do it in a department of this size. I don’t think it is impossible. 

I think any human problem can be fixed by human beings. I 

think the private-sector experiences that we have heard about this 

morning are being done every single day. So I appreciate from any 

and all the witnesses your recommendations on how and where in 

the Department we place responsibility for getting this done in an 

expeditious manner. 

Ms. BERRICK. If I can start, I would say there are a few things 

that will really be critical for DHS to address these issues and I 

think they are on their way to doing it. The key will be execution. 

The first is having a roadmap, you know, identifying what their 

problems are, what are the root causes of some of these funda-
57 

mental management problems, and how are they going to address 

those gaps. 

I think second, they need to identify the resources that are going 

to be needed to address those gaps and if they perceive funding 

shortfalls start prioritizing on which initiatives are more important 

than others and which are more time-sensitive. 

They also need a system of metrics and an oversight structure 

to make sure that they follow through on those plans, and then the 

final piece is show demonstrated progress in addressing the issues. 

These also very much mirror GAO’s criteria for removal from the 

high-risk list. We are not looking for perfection. We are looking for 

a sustainable, repeatable plan that can—you know, through which 

the Department can show demonstrated progress. 

Related to DHS, they have developed, I think, a good strategy to 

address these high-risk areas. I have seen them make the most 

progress in the past 3 years than I have seen since their creation, 

and they have made improvements to that strategy. 

They have put pretty good metrics in place. For the most part, 

they have identified resource needs and prioritized. The key now 

is really executing on those plans. They have some very promising 

initiatives related to acquisition, IT financial management, but for 

the large part they are in the early stages. 

DHS also has a very good policies and procedures. Their acquisition directive is very strong. It is consistent with best practices. 

The issue has been that they haven’t executed on that directive. So 

I think the bottom line, they have good strategy strategies and 

plans in place for addressing these management issues. The key is 

execution and continued oversight. 

Mr. WILLIS. Could I add on to that as well? 

Mr. BARBER. Please, doctor, yes. 

Mr. WILLIS. Thank you, Ranking Member Barber. 

You know, I would add a couple things. I have put in my written 

testimony some things the Department can do. I would like to highlight a few things Congress can do to help them. 

One is demand to see analysis for major decisions and systems. 

An example is a good one Congress did in the past when the Congress was considering acquiring advanced portal detectors. 

Congress and legislation said we need, the Secretary needs, to 

see a cost-benefit analysis and sign off on it before. That led it to 

National Academy’s panel that I was a part of that reviewed the 

cost-benefit analysis and said this is a cost analysis not a cost-benefit analysis. Subsequently, decisions were made of how to change 

that system. 

The second thing is that Congress can make sure that the analytic capabilities at the Department level have adequate and stable 

funding. I highlight adequate, not necessarily large. These—it 

doesn’t take—it is an ounce of prevention for a pound of cure here. 

Just to test this premise, we at RAND looked at our own studies 

for Department of Defense and we were able to find tens of billions 

of dollars easily of savings and avoided spending off a small fraction spent on those types of studies. 

Mr. BARBER. Mr. Killough. 

Mr. KILLOUGH. One example to add. In 2008 the Department of 

Veterans Affairs created the Acquisition Academy and the primary 
58 

objective at the Acquisition Academy was to support Departmental 

acquisition reform and program execution through the creation of 

curriculum and improved competency capabilities and the people in 

the acquisition and program management areas. 

That Acquisition Academy has functioned in training over 

10,000, I am not sure what the number is—it is 10- to 15,000 people in improved acquisition processes and in becoming experts in 

program execution since that time. 

In September 2012, the Veterans Affairs Office of the Inspector 

General released a report documenting savings in one specific area 

and that would be in veterans’ medical programs in the administration, acquisition, and management of programs; and an 

annualized savings of $390 million. 

The benefit of that is that they made a decision that the people 

that were conducting and acquiring assistance needed to be more 

highly confident in the knowledge and capability of defining the 

specific thing they need to acquire, also in eliminating redundancy 

and acquisitions across various different areas within the Department, and once they acquire the systems or acquire this capability 

to improve their capability to execute the programs. 

Mr. BARBER. You know, I would love to hear from other witnesses but my time is well over the allotted time, but I want to just 

say, and maybe in the second round I will come back to this, that 

the GAO reported earlier in your statement 1,800 recommendations I believe over the last 10 years. 

I have looked at many of those GAO studies, some of which I was 

involved in directly, and they are all pinpointing this problem, that 

problem, this issue, that issue, and what I see overall is a systemic 

problem not necessarily individual series of problems. 

My question really is trying to get at, how do we solve the systemic problem? You know, we hear about banks and other institutions being too big to fail and I just wonder if DHS may be too big 

to succeed in the sense of trying to get the job done. 

That is an editorial comment, not necessarily a fact, but I do 

think we have to make this Department work more effectively, and 

I am looking for a way to solving the overall problems, not just the 

specifics. 

Thank you, Mr. Chairman. 

Mr. DUNCAN. Thank you, Ranking Member. 

The Chairman will now recognize the Ranking Member of the 

full committee, Mr. Thompson, for a question. 

Mr. THOMPSON. Thank you very much, Mr. Chairman. 

I think one of the comments we hear quite often is a statement 

when you are talking about trying to fix things or improve them 

people will say, ‘‘Well we have always done it this way.’’ 

That kind of, I think, is part of the reason we are here is we 

have had people who looked at the agency who said, ‘‘Here are 

some better ways to do it.’’ We have had business people who have 

done acquisitions and other things who have said, you know, ‘‘Here 

are just some things that you, from a due diligence standpoint, you 

do if you are spending your own money, you want to get the best 

value.’’ 

We have some people who also have on a research side said, 

‘‘Here are some things that some other people have done and done 
59 

them successfully.’’ Well, Ms. Berrick, if I would say to you that 

there are five or six procurement systems within the DHS, would 

you see the value of streamlining procurement so that we would 

not have separate systems operating? 

Ms. BERRICK. I think related to procurement and acquisition, the 

key that we have seen at DHS is the need to have better oversight 

at the Department level of what the components are doing and for 

the under secretary of management to have authority over the component acquisition executives because there is a process at the 

DHS level, there is a process at the component level, and sometimes those two processes don’t flow together as they should. 

So there is a lack of oversight. DHS is taking some action to improve that and have in fact strengthened the authority of the under 

secretary, but more work still needs to be done. 

Mr. THOMPSON. All right. Now, does the work need to come from 

the Secretary of DHS or does it require Congressional direction? 

Ms. BERRICK. I don’t think it requires Congressional direction to 

organize internally and provide oversight that is needed. 

Mr. THOMPSON. Right. Well, one of the things, we put 22 agencies together and we inherited the culture of some of the legacy 

agencies who were a little more mature versus the new kids on the 

block, and so we see the legacy agencies kind of being the thousand-pound gorilla sometimes. 

Another thing Dr. Willis, that in an effort to consolidate, the perception is that if we have these programs and we consolidate them, 

that will save money. 

The Department has proposed to consolidate its 16 grant programs into one. We had a budget hearing. We have had the Secretary here. We were saying, ‘‘Okay, how are we going to get the 

efficiencies out of consolidation?’’ The response comes back most 

often, ‘‘Well, we will just have one program and we will do these 

missions.’’ 

Well, but we don’t have the analytics and other things that go 

with it to say that we will be able to maintain the effectiveness of 

the programs by consolidation. What is your opinion of the consolidation? 

Mr. WILLIS. I think this goes back to my main point about the 

need for early and sound strategic analysis. We know that these 

programs are important from communities because we are praying 

it succeeds; it is important, if it fails like it did in Katrina, it can 

be devastating. 

We know that these programs have put in place capacities that 

people have bought things, people have done—but there are things 

that we don’t know because we don’t have planning and analysis. 

We don’t know whether this capacities are actually making us prepared and we don’t know what the next strategic step should be 

taken to improve it. 

Similarly, we should probably consider whether this organization 

of going from 16 to 1 is in fact something that will align—allow us 

to do better leadership or whether there are other factors—actions 

that should be taken. 

Mr. THOMPSON. Mr. Killough, if I told you that 10-plus years 

later we still have almost as many contractors working in DHS as 

we have FTEs, what would you think of that? 
60 

Mr. KILLOUGH. Well, clearly there are needs to have subject matter experts and contractors hired to—in specific instances, but the 

cases where contractors or non-affiliated employees are contracted 

to augment staff on a long-term basis generally finds that the home 

or parent organization hasn’t been able to generate the capacity or 

the capability to be competent and have competencies in that specific area of expertise. 

Mr. THOMPSON. Well—well one of the things that we have asked 

the Department to do is we have been told that there are people 

in the same department doing the same job but that private contractors are being one-and-a-half to two times what the Government employee is being paid to do the same job. 

Now I think we can save money; either make a determination 

that we need to over time scale back and bring people in-house and 

build a capacity or we doing something wrong. 

But over 10 years later we still have private contractors doing, 

not the technical that you talked about, but basically the jobs that 

full-time employees normally do, procurement, HR, other kinds of 

things. So would you say to us that it would be a good idea to look 

at those private contracts and see if we getting our money’s worth 

or could we do to better way? 

Mr. KILLOUGH. Well, first of all, a lot of the times there is an authorized head-count issue. So sometimes it is the chicken or the 

egg. So if you are going to authorize in the Department head count 

for Federal employees, that is one thing, but if you are not going 

to authorize increased head-count in order to change the contractor 

to an employee, then you are just going to have a problem with 

execution. 

Mr. THOMPSON. Well I appreciate it but, you know, I think if a 

Department head would come and say, ‘‘I could save the taxpayers 

10 percent of this budget by going from this process to the other,’’ 

do you think somebody would make the argument on head-count or 

is it a cost efficiency? 

I guess, Dr. Stern, you the businessman. If somebody walked in 

to you and said, ‘‘Dr. Stern, we could save this company 10 percent 

by doing it this way. It wouldn’t lose any efficiency,’’ just your— 

I know there would be some checking that you would do, but how 

would you respond to that? 

Mr. STERN. I would definitely proceed to do it, execute it. I get 

the sense from the broader conversation that what we have is kind 

of a—on the one side a penalty-free system that leads to inaction. 

On the flipside, the total lack of desire to take a risk, take a step 

forward, because there is no reward for doing so. 

In aggregate we don’t see the cliff, okay. As a Nation, now we 

do but there are pieces that we do, but we don’t really see the urgency that we find in business where you are seeing a business 

that is really heading for bankruptcy, and you better take action 

and frequently take risky action, you execute, and then you make 

it come out right. 

Don’t see that happening here. Not sure how you induce that in 

the Government. It is certainly a need, and I think the opportunities are anonymous for consolidation, combining function, reducing 

the level of structure in an organization, having fewer levels of 
61 

management between the person who is executing and that the one 

sitting at the top. 

Anytime you have 13 signatures required to approve a capital acquisition, you know darn well that in between those 13 signatures 

most of them never read it. They just sign off on the assumption 

that somebody else read it. 

Just eliminate those and streamline it and get on with it. We 

have done it many times and I have been involved in having saved 

many companies many businesses by just—and obviously pick the 

right people to execute. 

One thing you touched on which I think is important you want 

to have good financial and IT systems in place that allow you as 

a manager to track the progress against the objectives set. So that 

area is crucial. 

Mr. THOMPSON. Thank you very much. I yield back. Thank you 

for—— 

Mr. DUNCAN. Gentleman’s time is expired. 

I think he said on an age-old debate about the private sector and 

risk-taking and risk-benefit analysis and reward and bureaucracy 

or large—whether it is Government or large industry—where people get in a comfort zone and don’t want to take that risk. 

We see that. That and the longer they stay in that job, the less 

risk-taking they do. So I appreciate your perspective on that and 

we will probably talk about that in Round No. 2, but the Chairman 

now recognizes Mr. Payne for a question. 

Mr. PAYNE. Thank you, Mr. Chairman. 

You know, I as a Ranking Member on Emergency Preparedness 

and Communications have continually had this whole issue around 

interoperability come up and this question is for Ms. Richards, but 

anyone else who might want to add their thoughts, please feel free 

to respond. 

Now I represent New Jersey’s 10th district in northern New Jersey and my district felt the devastating effects of Hurricane Sandy. 

It is clear from my conversations with first responders who I am 

interacting with all the time during and after Sandy, interoperability is an essential—it is essential to responding to disasters. 

But you stated that there are roadblocks to achieving interoperability including DHS’s failure to establish clear guidelines or effective governing structure with authority and responsibility to oversee achievement of Department-wide interoperability. 

Could you expand on what more Congress can do in helping DHS 

achieve interoperability? Does it take legislation that clearly sets 

the guidelines and the—and a time line to comply with actions like 

standardizing radioactivity? 

Ms. RICHARDS. Thank you for the question. It is a crucial question and very important to all of us. 

The Department should have the capability with the authorities 

that they have now to establish that governance structure. The Department believes that collaboration on this issue through memorandums of agreement and understanding from the components 

will get them there. 

My audit work indicates that that collaboration is not at the 

point where it is going to get them there quickly. We continue to 

discuss with the Department our recommendation and the need for 
62 

that authoritative governance structure to make decisions and disseminate the one decision throughout all of the components. 

Mr. PAYNE. What is their response to that? 

Ms. RICHARDS. Their response continues to be that their joint 

working group is up to the task. 

Mr. PAYNE. Yet, and still, we have not achieved it and, you 

know—I am by no stretch of the imagination a rocket scientist but 

to get everybody on the same channel, you know, doesn’t seem like 

it could be that difficult. I know we have wide-ranging number of 

entities involved but—— 

Ms. RICHARDS. I would say in an effort to explain some of the Department’s other issues they are upgrading their communication 

systems; the infrastructure that supports it. There are technical 

upgrades that they are putting in place that will or should improve 

the situation. 

But in my view, the basic getting out to your radio operators the 

information about the common channel and how to reach it and to 

the technicians that are programming the radios the information 

that that channel needs to be programmed in is extremely important and it should be fairly straightforward. 

Mr. PAYNE. You know, we have a little technology that was developed a decade ago called email and, you know, that potentially 

could be helpful in everyone—I know I get a lot of them every day 

on a myriad of issues. 

So that might be something they look at. Does it—do you think 

it, you know, would take legislation to set up a subdepartment? I 

mean, here we go, building out again—a subdepartment to have 

the governing authority to oversee this achievement toward interoperability because it is—I mean, it is the key. 

Ms. RICHARDS. Certainly that would push the Department into 

doing something. This to me is a critical issue for the Department. 

Secretary Napolitano has very rightly stated that one of her most 

important goals is to create One DHS. 

As you are all aware it has been 10 years, which is a long time, 

but not a long time in the history of organizations. Some of the organizations that were put together date back to colonial times, 

such as the Coast Guard and the Customs Office. 

They are very proud organizations; overcoming those cultures to 

bring them together to work as one common organization is difficult. The Department administration is pursuing the issue. They 

have not been as successful as I would like to see. 

Mr. PAYNE. Thank you. 

Mr. DUNCAN. Thank you. 

Committee, we do have time for a second round of questioning 

which I would like to personally get into and we will work through 

the process if you guys want to, but so I recognize myself for 5 minutes for additional questioning. 

Yesterday, we had the NFL draft, and I will guarantee that those 

NFL teams didn’t sign more defensive tackles than they needed. 

They didn’t decide, you know, what we like this guy is a good athlete, we have got two free safeties, but let’s go ahead and sign a 

third one, and I know we have got to pay too much for him, but 

let’s go ahead and get a third one just because he is a likable guy 

or just because we might think we might need him down the road. 
63 

They did strategic planning, look at the assets they have, look at 

the assets they may need in the future for a long-term vision for 

where they want the team to go, the growth that they are going 

to need, the age of the assets they currently have. That is how 

business operates. 

So I think Government needs to operate that way, as well, and 

I think you if you went on the street and asked average Joe American these questions about, ‘‘Well we are $16.8 trillion in debt as 

a Nation, we have got an agency that really was—has been in existence for about 10 years and we are looking back at it, we understand it has got a $60 billion budget to it, 225,000 employees, but 

we have identified where this person or this system is doing the 

exact same thing as this system over here, but what should we do?’’ 

They are going to say, eliminate one of them. Let’s just let one 

of them do the job. Let’s let one group do that job. That is what 

private sector would do. So I think this is very timely and I think 

this ought to transcend just that DHS. This ought to apply to every 

Government agency. 

We ought to do the same analysis here in Congress where we 

have duplication and wasteful spending that can be cut. This is 

low-hanging fruit for the American taxpayer, this is low-hanging 

fruit for Congress, and it should be low-hanging fruit for the agencies as they apply stewardship methods to their own agencies. 

They shouldn’t need an oversight hearing from a Congressional 

committee to recognize duplication, recognize waste, and start 

making the right decisions for the taxpayer. 

So having said all that rant, Mr. Killough, I want to ask you this; 

you know, some of the challenges for acquisition programs include 

lacking experience acquisition and contractor personnel. 

You touched on that just a little bit so how would Government 

go about hiring and educating and getting the right skills to the 

right people in the acquisition process because I foresee that as 

part of the big problem here. How do we identify those people? How 

do we get them the right skills, I guess is the question? 

Mr. KILLOUGH. Well, part of my recommendations was the first 

step is defining through adequate job descriptions or what they call 

in the Government, job classifications of these—the critical skills 

and knowledge that a person needs to have in order to perform the 

acquisition functions. 

So you create job classifications in those areas that you feel that 

you need improved capacity or improved competency in order to become more efficient. 

Mr. DUNCAN. So what you are telling me, based on your analysis, 

that there is not an identified tasked acquisition person within the 

agency to buy a communication system and there is not a tasked 

person with that responsibility to buy IT systems. I know there is 

there but—— 

Mr. KILLOUGH. Well I am not completely versed in all of the 

OPM job classifications. I am particularly commenting on the areas 

of the program management aspects of it. I know there isn’t that 

across-the-board in the Government in program and project management. It only exists today in the IT space. 

So there are program and project management activities being 

done in every department in every level in this Government and 
64 

we only have one area where it is specifically addressed the skills 

and knowledge required to do those jobs and that is in the IT 

space. 

Mr. DUNCAN. I think that is important. Thanks for touching on 

that. 

I want to just shift gears to Dr. Stern for a minute because on 

page 4 of your written testimony—and it is part of the record by 

the way—any written testimony you provide is part of the record, 

but you say that, ‘‘Even after 10 years under the same management umbrella, the Department is riven with conflicting cultures 

and customs.’’ 

So we had a lot of independent stand-alone agencies or subagencies who are now brought under the DHS umbrella. We have heard 

this from others, but now you even bring the topic up is that we 

have conflicting cultures and customs. 

So how does an agency as big and broad as DHS is, with standalone independent agencies that are now a part of something bigger—private companies have this problem as well as they do acquisitions and those acquired companies are now a part of something 

broader, how do they buy into that culture? 

How do they start writing for that brand and how can DHS 

apply that writing for the brand mindset to what they are doing? 

I use the example that you have got the Coast Guard, you have got 

Secret Service, which was part of Treasury, you have got CBP and 

ICE, which is part of something broader—stand-alone but broader 

independently—now they are all part of this DHS umbrella. So 

how do we start working on that culture because I think that is 

vital to the on-going mission? 

Dr. Stern. 

Mr. STERN. In business, you encounter the same problem every 

time you acquire a couple of companies and merge them or frequently more than a couple of companies and you really—you state 

your mission and objectives in a broader sense to all involved and 

you force the issue. 

You actually force it, and those who that don’t want to subscribe 

to it get invited to go do other things. It is interesting how rapidly 

people do adjust to the common thrust of the new entity because 

they have a lot at stake. Okay? 

Government has less flexibility or less desire to do what I am 

talking about as far as removing people from one organization that 

turn out to be disruptive to the new mission and new thrust, but 

it is a must-do. I don’t think it is an option. Okay? 

In business, the end result would be disastrous if people didn’t 

subscribe to the same objectives and the same philosophy. But I 

have seen it again and again and—there are people that will never 

change; don’t fit. It is not to say they are not capable as far as professionals but they are better off going somewhere else. 

Mr. DUNCAN. It is almost like a tenure aspect and you can’t remove them and they do affect the morale because, ‘‘Well this isn’t 

how we did it in the old organization,’’ and I have seen that in private sector, ‘‘Well, we did it this way before.’’ ‘‘Well, that entity has 

gone away. Now you are a part of something broader and this is 

how we are going to do it and buy into it and go home.’’ Sort of. 

That mindset. 
65 

I will applaud the Secretary and the Department for coming up 

with the One DHS mindset. I thought that was the right thing but 

they have got to continue pushing that down and they have got to 

do a lot of the things that you have said is that we have got to have 

the ability to remove those disruptive elements and those that 

aren’t part of the team. 

We have got to be able to make those trades, to go back to the 

NFL analogy. We have got to be able to recruit good team players 

with the right assets and we have also got to be able to let some 

guys go, cut them, send them back to minor-league, whatever. So 

with that, I will yield to the Ranking Member for a question. 

Mr. BARBER. Thank you, Mr. Chairman. You know, in another 

life many years ago I was involved with a publishing company and 

my job was to ensure that acquisitions and mergers were properly 

managed. 

I was the coordinator of all of the different departments that had 

to get on board and one of the things that I found that was most 

effective, apart from the fact that the CEO said ‘‘we will do this,’’ 

was a singular deadline by which each component had to get its job 

done in order to meet the common goal. Sometimes I am not sure 

if that is existing in the Department. 

Well, I just like to ask the witnesses, particularly Dr. Stern and 

perhaps Ms. Richards and Mr. Killough—if you could imagine the 

circumstance; tomorrow you were appointed Secretary of Department of Homeland Security—a more enviable job you could not find 

in Federal Government. 

[Laughter.] 

Mr. BARBER. You had the lack of smarts to take this job because 

you thought you could do something better. What would you do? 

Dr. Stern, let me ask you that. You know, going back to the earlier question we have so many—we have pinpointed so many individual problems with this system or that system, and as I said earlier I think it is a systemic problem of how you manage the Department, the second-largest Department in the Federal Government, 

250,000 employees, billions of dollars in taxpayers’ money. 

I want to be a part of a solution here as a Member of Congress 

and I would like to know what you think, if you were the Secretary, what would be the first steps you take given the constraints 

that, you know Government has that are different from private sector, what would you do to get the job done on a systemic level? 

Mr. STERN. The first step would be to—in conjunction with the 

leaders of the different departments—operating units—is come up 

with a mission statement that is very clear and very understandable. 

I was involved many years ago in a hostile acquisition that with 

mixed feelings we executed on. We ended up with 120,000 employees; so half of homeland security. It was significant with very different philosophies. 

But we did it. We laid out a very clear mission statement and 

subset to that with very measurable quantitative objectives, with 

dates, schedules, and quantification where appropriate, and we put 

in place a risk reward system for the key leaders for the individuals to execute on it and the risk was departure from the company. 
66 

The rewards were incentives and we were generous with incentives. 

We cut the organization way back because that was part of the 

objectives underlying it all and on balance it worked, but there has 

to be clarity of mission and clarity of the objectives and they should 

generally be very measurable and then management follow-up, and 

the willingness to execute and you do take some risks in doing so. 

Now whether I could do it as a Secretary here, I don’t know. 

Mr. BARBER. Smartest answer might be, ‘‘Thanks, but no thanks’’ 

to that job, right? But I think it is serious—I mean obviously this 

is a Department that we pulled together at a time of great crisis 

in our country and I think there has been a lot of progress made. 

I don’t want to in any way suggest that I think we have not come 

a long way in those 10 years, and as Ms. Richards pointed out, in 

the life of an organization of this size, 10 years, is not a long time. 

Although there is a level of impatience that I have and that my 

constituents have and I think the country has with, why we can’t 

get better faster? 

So Ms. Richards, I want to offer the enviable job of being appointed Secretary. As he you look inside the Department in an objective way, what would you do? 

Ms. RICHARDS. Well, first of all, I would like to remind everyone 

that I am an auditor at heart and we are detailed people. So we 

would probably be a bad choice for the job. 

[Laughter.] 

Ms. RICHARDS. In addition to all of the things that Dr. Stern 

said, which—many of which the Department has worked very hard 

to do, they have also gone through an exercise called the BottomUp Review. One of the things that I see from my perspective is 

that there is a lack of clarity of data. 

It sounds very simple. It is enormously time-consuming to get it 

right. We did an audit recently on detection equipment and we 

looked to see for commonalities among the different components 

that use detection equipment such as walk-through metal detectors. 

They had it on their inventories but they had all defined it differently so there was no way to pull from a centralized viewpoint 

the information that would tell them how many metal detectors 

they had or where they were. So if they needed to shift them or 

share them they didn’t have that information readily available. 

One of the things that, not as Secretary because it is too in-theweeds for that job, but one of the things the Department needs to 

do is to start setting those data dictionaries and commonalities and 

defining the resources that they have both physical resources and 

their employees, the skill sets that they have, so that they can 

share—do information sharing—share radios that one component 

might have that another component may need. I think that that is 

critical to the success of the Department into achieving that One 

DHS and getting to the efficiencies that they need. 

Mr. BARBER. Would any other witness care to be Secretary for a 

day or a year or whatever and give us what you would do? Ms. 

Berrick. 

Mr. STERN. Should I give you—— 

Mr. BARBER. Can I go to Ms. Berrick first, please? 
67 

Ms. BERRICK. Sure. You had made a comment earlier that I 

think relates to this question. You said you spend time reading a 

lot of these reports with lots of recommendations, and really what 

does all of this mean? 

GAO actually went through an exercise where we looked through 

those 1,800 recommendations, 1,300 reports on the 10-year anniversary of 9/11 and we issued a report basically identifying our 

take on DHS’s progress and what do they need to do moving forward. Looking across all those recommendations, we saw three 

themes that were common that negatively affected DHS’s progress. 

So if I were a Secretary for the day would address these three 

themes. The first is the management of the Department. When you 

talk about acquisition and IT and financial management and in the 

abstract way it is hard to see the direct link that has on DHS’s 

abilities to meet its missions. 

So for example in acquisition management there have been a 

number of programs that DHS has had to cancel or significantly 

scale back and this is to secure the border and this is to secure air 

travel because they weren’t managed properly. In fact, we identified $1.75 billion and that related to eight such of those programs 

that were scaled back. 

Financial management, they need information, you know, senior 

leadership needs the information to manage their operations. DHS 

senior leadership doesn’t have that visibility today. They are working towards that but they are not there yet. So management of the 

Department I would focus very strongly on strengthening all of 

those core management functions. 

The second theme we saw is, and it is been discussed today, performance, measurement, strategic planning, cost-benefit analysis, 

before DHS pursues a solution, to what extent are they looking at 

the alternatives and weighing the costs and benefits and also risk 

management plays a role in there. 

We found that DHS has done a lot to assess risk. They are doing 

less to incorporate that information into planning, programming, 

and budgeting decisions. 

The third cost-cutting area that I would pay attention to is information sharing and partnerships and coordination. DHS—you 

know, it is a homeland security enterprise. DHS has to work with 

State, local, the private sector, international partners. They have 

made a lot of progress in this area, but they can do more to 

strengthen those relationships as well as improve information sharing within and outside the Department. 

Now overall I think DHS is about where you would expect them 

to be, you know, 10 years into their existence, but I, because that 

is early and this can take years to achieve, but I do think these 

three cross-cutting themes are really—we are at a point where they 

are really negatively affecting their ability to be effective, and I 

think they need to be addressed moving forward. 

Mr. BARBER. Is there time for one more, Mr. Chairman? 

Mr. STERN. Could I give you—— 

Mr. DUNCAN. I am going to give some leeway—— 

Mr. STERN. I am sorry. 

Mr. BARBER. Dr. Willis, first please. 
68 

Mr. WILLIS. Okay. I just very quickly to add on to some of the— 

I would of course like Dr. Stern said, clarify the strategy, identify 

the people to implement that and empower them, but I would also 

be doing one thing alongside to draw on the corporate analogy. 

I would communicate that strategy to my board fairly early on 

before I get too far into it, and I would point out in this context 

Congress—there is an analogy between the board and the corporate 

board between Congress, but there is not one board for DHS. So 

I would like to draw that analogy. 

Mr. STERN. I was going to give you a quick example on how attitudes change and it can be done—it was budget time of a large 

company and we were getting the budgets from the different parts 

of the company to put it together. 

There was one division that came in and like all others we need 

more of this or we need more head-count here or we need to expand 

there and there and we are trying to trim back the budgets but 

they were adamant about it. 

Conclusion in the later phase, we decided to sell that division because it didn’t fit our mainstream business. Turns out that the 

management of the business succeeded in raising the capital and 

buying that division themselves. We sold it to them. 

You should have seen the rapid change of attitude to spending 

that took place within that division. Suddenly it was theirs. It was 

their money. It was their success. Not the overall. It was amazing, 

and you see that again and again and again. 

Mr. BARBER. We should be spending the taxpayers’ money as we 

would our own, and that is where I will close. 

Thank you, Mr. Chairman. 

Mr. DUNCAN. You are quite welcome. 

The Chairman will recognize Mr. Payne for the final question of 

the day. 

Mr. PAYNE. Thank you, Mr. Chairman. 

Ms. Berrick, kind of open the door for me in terms of stating that 

DHS has improved in information sharing. Where—in what areas 

has that been and where are they still lacking and where else do 

they need to improve on State and Federal international level? 

Ms. BERRICK. Really, in the information sharing they have made 

a lot of progress in these past few years identifying what their information-sharing initiatives are, defining those, and also clarifying 

how those tie into the broader information-sharing environment. 

They have a pretty good set of metrics to measure their progress 

in implementing those initiatives. But largely due to funding shortfalls, they are having some difficulty moving forward with some of 

those. 

So I think they had good strategies and plans in place. It is going 

to be executing, moving forward, and also prioritized among the 

different information-sharing initiatives that they have, and part of 

that is partnering with the other departments that have key information-sharing responsibilities. 

With respect to coordinating with State, local, private-sector, and 

international partners, this has been a theme that we have identified in a lot of our work where DHS could do more to strengthen 

those relationships, leverage information at those parties, have and 

in some cases work to not duplicate what each other is doing. 
69 

I think DHS has made tremendous progress since it was created 

in that area, but I think they had continued work to do to strengthen those relationships. 

Mr. PAYNE. Okay. I just had another question on another topic 

for Mr. Killough. 

You know for years what I am hearing at DHS, you know, there 

is a low morale, and it has been notoriously low. In your research 

have you determined what the key reasons why low morale exists 

in the workplace and how does that morale impact program management, and how does this affect productivity and results? 

Mr. KILLOUGH. Sources of low morale are many and varied, but 

a lot of common things are the fact that there are oftentimes people 

in an organization don’t understand the objectives or don’t understand where they stand relative to their performance. 

One thing is that the organization has got to understand, what 

does success look like? Management has got to help them define 

what success looks like so—and to also answer some of what Mr. 

Barber was talking about is that you have got to put leadership in 

place. 

You get to create clarity to define achievable objectives. You have 

got to define a way of reporting against those objectives that is 

transparent. Everybody knows how everybody else is doing and you 

need to celebrate success but you need to define what success looks 

like. 

So morale is—it can be low when people are—lack the appropriate motivational environment because they are not really sure 

how well they are doing, whether they are being successful or 

being—achieving what they are supposed to, and therefore they 

don’t—there is no self-satisfaction established out of that. 

So they have got to understand where am I going to be? What 

does it look like when we are a successful organization or when I 

am a successful person? 

Mr. PAYNE. Well, I appreciate that and moving forward that is 

something that I am going to be interested in pursuing in terms 

of the morale of the people in the Department to get—to maximize 

their potential and do the things we need to do to continue to make 

sure that the Nation is safe and secure. 

So with that, I yield back. 

Mr. DUNCAN. Okay. I think you are right there, Mr. Payne. 

I want to thank the witnesses for their valuable testimony today. 

I learned a lot, and I appreciate you coming and being a part of 

this. 

I want to thank the Members for the questions. I think you see 

the bipartisan nature of investigating duplication and wasteful 

spending and trying to maximize taxpayer dollars and keeping our 

Nation safe as Mr. Payne said at the end there. 

So the Members of the committee may have some additional 

questions for the witnesses and we will ask that you will respond 

to those questions in writing. 

With nothing further and without objection, the subcommittee 

will stand adjourned. 

[Whereupon, at 10:53 a.m., the subcommittee was adjourned.] 

(71) 

1See GAO, Information Sharing: Agencies Could Better Coordinate to Reduce Overlap in FieldBased Activities, GAO–13–471 (Washington, DC, Apr. 4, 2013). 

A P P E N D I X 

QUESTIONS FROM CHAIRMAN JEFF DUNCAN FOR CATHLEEN A. BERRICK

Question 1. GAO reported greater overlap in the analytical activities of fusion centers and FIGs than in any of the other entities; for investigative activities, fusion 

centers, and Regional Information Sharing Systems had the most instances of overlap. What steps is DHS taking in conjunction with DOJ to address this duplication 

in effort? 

Answer. The Department of Homeland Security (DHS) concurred with the two 

GAO recommendations intended to help reduce unnecessary overlap and leverage 

resources among field-based information-sharing entities and, in conjunction with 

the Department of Justice (DOJ), is taking steps that begin to address one of the 

recommendations.1 Specifically, DHS, in a letter to GAO on how it will respond to 

the recommendations, stated that it plans to use its annual assessment of fusion 

center capabilities to gather data on steps the centers are taking to better coordinate analytical activities with all four of the other field-based information sharing 

entities in our review—Field Intelligence Groups (FIG), Regional Information Sharing System (RISS) centers, Joint Terrorism Task Forces (JTTF), and High-lntensity 

Drug Trafficking Area (HIDTA) intelligence centers. DHS reported that it is currently using the assessment to track the extent to which fusion centers have representatives from the other four entities on their executive boards, are co-located 

with other entities, and issue products jointly developed with other entities. These 

data should provide DHS with a current baseline of the extent to which fusion centers have such collaborative mechanisms in place. DHS also stated that it is planning to: (1) Add questions to its annual assessment to determine the degree to 

which these entities collaborate on their analytical activities, (2) use the results to 

monitor and evaluate coordination among field-based entities, and (3) report these 

data in the National Network of Fusion Centers Final Report, which is expected to 

be issued during 2013. 

In addition, DHS reported that it, along with the Federal Bureau of Investigation 

(FBI), co-chairs the Fusion Center Subcommittee of the Interagency Policy Committee for information sharing, within the Executive Office of the President. DHS 

stated that under the auspices of the subcommittee, DHS, the FBI, and the Office 

of National Drug Control Policy (ONDCP) can collaborate to identify and assess 

characteristics of coordination among entities. The co-chair of the Interagency Policy 

Committee for information sharing stated that agencies are making progress in assessing ways in which fusion centers and HIDTA intelligence centers can further 

collaborate, and are starting to discuss RISS center collaboration, but have not addressed opportunities to better collaborate with the FBI’s FIGs and JTTFs. GAO 

recommended that the Secretary of Homeland Security, Attorney General, and director of ONDCP have their respective organizations work together to assess areas 

where they can: (1) Take advantage of co-locating entities, (2) have more participation across entities on their respective executive boards, or (3) implement other 

ways to collaborate. Agencies using the results of the annual fusion center assessments and the subcommittee structure, among other tools, to determine where else 

they can implement collaboration mechanisms Nation-wide would be responsive to 

our recommendation. 

DHS, DOJ, and ONDCP have not yet begun to address an additional recommendation—that they develop a mechanism to hold the heads of their respective 

field entities accountable for such collaboration and demonstrating the results 

achieved through it. The three agencies indicated that they already hold their field 

entities accountable for sharing information and track this through metrics. However, our recommendation goes beyond having agencies simply agree to share infor-
72 

2GAO, Department of Homeland Security: Oversight and Coordination of Research and Development Should Be Strengthened, GAO–12–837 (Washington, DC: Sept. 12, 2012). 3GAO–12–837. 

mation. Rather, the recommendation addresses the need for entities to coordinate 

on their analytical and investigative activities and resources, and be held accountable for doing so. 

Given that the agencies have not yet addressed our recommendations, GAO will 

continue to track their progress through our recommendation follow-up process. In 

addition, the co-chair of the Interagency Policy Committee for information sharing 

is planning to inventory how some of these field-based entities are already collaborating and publicly account for the results in an annual report to the Congress, 

which we also recommended as a way to help hold agencies accountable. 

Question 2. Is DHS on track to develop a uniform oversight function and definition of R&D across its components by the May 2013 deadline as reported to GAO? 

What form will this new function take (e.g. management directive, policy guidance) 

and how will it consistently prevent duplicative research activities? 

Answer. As you know, in our September 2012 report, we made several recommendations to the Secretary of Homeland Security to help DHS better oversee 

and coordinate research and development (R&D) investments and activities across 

the Department.2 Taking action to implement these recommendations would better 

position the Department to know what R&D activities it was undertaking and the 

costs of those activities, as well as to address overlap, fragmentation, and the risk 

of unnecessary duplication. Specifically, we recommended that DHS develop Department-level policies and guidance for defining, reporting, and coordinating R&D activities across the Department; and that DHS establish a mechanism to track R&D 

projects. We also noted that such policies and guidance could be included as an update to the Department’s existing acquisition directive. 

DHS agreed with our recommendations and planned to evaluate the most effective 

approaches to better manage R&D across the Department. For example, DHS said 

it was considering a management directive, multicomponent steering committee, or 

new policy guidance to help better oversee and coordinate R&D. According to DHS 

officials, a decision on which one of these approaches to take was to be made by 

May 1, 2013. In following up with DHS in June 2013, the Department had not yet 

determined which approach it would implement to address our findings and recommendations, but planned to make a decision soon. We believe that the options 

DHS is considering, if implemented effectively, could address the issues we identified in our report and meet the intent of our recommendations. Specifically, developing policy guidance to define and coordinate R&D activities across the entire Department could help ensure that DHS components that conduct R&D report their 

efforts and investments consistently and are aware of each other’s research activities, which would help to avoid unnecessary duplication. 

Question 3. GAO reported that S&T knew that Secret Service and ICE were conducting R&D in the area of mobile radios but CBP moved forward with its own efforts anyway. Why didn’t the components coordinate? Was this a failure of the process? Who is to blame? 

Answer. This example—cited from our September 2012 report—was used to demonstrate a case of effective coordination between the Science and Technology (S&T) 

Directorate and DHS components.3 Specifically, S&T officials stated that when Customs and Border Protection (CBP) requested mobile radios to improve communication among its field staff, S&T knew that the Secret Service and U.S. Immigration 

and Customs Enforcement (ICE) were already working in that area because of its 

existing R&D relationships with these components. To address this technology need 

and better coordinate these R&D efforts, S&T provided a senior official to lead and 

coordinate the Tactical Communication Team to address the tactical communication 

needs of these operational components, and to coordinate, as appropriate, R&D for 

needed mobile radios. S&T officials stated that in the absence of a DHS policy or 

process to prevent overlap or the risk of unnecessary duplication, such relationships 

with components helped to mitigate that risk. 

While relationships can help to prevent unnecessary duplication, we found that 

DHS did not know the total amount its components invested in R&D and had no 

policies or guidance for defining R&D and overseeing R&D resources across the Department, which is needed to help effectively manage these investments. We also 

found that DHS had not developed a policy defining who is responsible for coordinating R&D and what processes should be used to coordinate it, and had no mechanisms in place to track all R&D activities to help prevent overlap, fragmentation, 

or unnecessary duplication. As such, we recommended that DHS develop Department-level policies and guidance for defining, reporting, and coordinating R&D ac-
73 

tivities and establish a mechanism to track R&D projects. DHS agreed with our recommendations and is taking action to address them, as discussed in our response 

above. Taking action to implement these recommendations would better position the 

Department to know what R&D activities it was undertaking and the costs of those 

activities, as well as to address overlap, fragmentation, and the risk of unnecessary 

duplication. 

Question 4. According to GAO’s High-Risk report, DHS needs to strengthen its 

management functions. Of the major DHS management areas GAO reviewed, acquisition management had made the least progress. GAO has previously reported billions of dollars in cost overruns in DHS major acquisitions despite its acquisition 

policy that reflects aspects of best practices. What legislative action could this subcommittee/committee take to ensure the Department improves its acquisition outcomes? 

Answer. DHS acquisition policy consists of Acquisition Management Directive 

102–01, an associated guidebook, and 12 appendixes, and it reflects many key program management practices that, when properly implemented, would help DHS deliver systems on-time within established budgets, and that meet performance expectations. For example, the directive requires programs to develop documents demonstrating critical knowledge that would help leaders make better-informed investment decisions when managing individual programs. DHS has also taken additional 

steps to enhance its acquisition management. For instance, as of June 2013, DHS 

had launched seven Centers of Excellence to enhance component acquisition capabilities and improve insight into program management challenges before they become major problems, and has also taken some steps to improve investment management. Each DHS component further established a Component Acquisition Executive to provide oversight and support to programs within the component’s portfolio, 

and DHS began to operate a business intelligence system to improve the flow of information from component program offices to the Management Directorate to support its governance efforts. 

However, we have found that DHS leadership has continued to allow programs 

it has reviewed to proceed with acquisition activities without meeting program-management requirements, and has not always followed its own guidance for managing 

and overseeing major acquisition programs. Officials explained that DHS’s culture 

has emphasized the need to rapidly execute missions more than adhere to sound acquisition-management practices. Our work has found that most of the Department’s 

major programs are at risk of cost growth and schedule slips as a result. In particular, we found that these programs do not have reliable cost estimates, realistic 

schedules, and agreed-upon baseline objectives, which DHS acknowledges are needed to accurately track program performance, limiting DHS leadership’s ability to effectively manage those programs and provide information to the Congress. 

DHS recognizes the need to implement its acquisition policy more consistently, 

but significant work remains. To help support continued progress in this area, the 

subcommittee/committee could require that DHS’s annual budget justification include: (1) A list of major acquisition programs that do not have baselines approved 

in accordance with DHS acquisition policy, (2) statements for each of the programs 

explaining why their baselines have not been approved, and (3) the amount of funding DHS is requesting for each program lacking an approved baseline. The program 

baseline is the agreement between program-, component-, and Department-level officials establishing how systems will perform, when they will be delivered, and what 

they will cost. The program baseline also includes performance parameters expressed in measurable, quantitative terms, which must be met in order to accomplish an investment’s goals. This information would enhance DHS leadership’s ability to effectively manage its acquisition programs and inform Congressional decision 

makers’ deliberations as they consider funding options for such programs. 

QUESTIONS FROM CHAIRMAN JEFF DUNCAN FOR ANNE L. RICHARDS

Question 1. The Visa Waiver Program was established in 1986 to promote international tourism without jeopardizing U.S. security. The Immigration and Nationality Act, as amended, requires the Secretary of Homeland Security, in consultation 

with the Secretary of State, to assess the law enforcement and security risks of Visa 

Waiver Program countries, and terminate a country from the Visa Waiver Program 

if necessary. In November 2012, the IG recommended that the Visa Waiver Program 

Office develop processes for communicating with embassy and foreign representatives the standards for Visa Waiver Program countries to achieve compliance, and 

for meeting mandated time frames for reporting on a country’s compliance with program requirements. Has DHS taken action to improve the Visa Waiver Program? 

What do you believe still needs improvement? 
74 

Answer. The Visa Waiver Program Office (VWPO) concurred with our recommendation and provided revised guidance for Embassy and State Department 

desk officers for engaging with countries interested in the VWP. This guidance was 

developed by the U.S. Department of State’s Bureau of Consular Affairs (CA) and 

cleared by the VWPO to help ensure that Embassies and State desk officers do not 

discuss the VWP without DHS and CA guidance and thus unduly raising VWP expectations of a country. In addition, the VWPO developed diplomatic notes notifying 

a VWP government of a review’s conclusion and the resulting determination. 

Due to the sequester, the Office of International Affairs has implemented a hiring 

freeze, delaying the recruitment for the existing vacancy in the VWPO. The OIG recommended an assessment of the overall staffing model and is concerned that the 

current staffing level (including the vacancy) is inadequate to handle the review and 

oversight of the increasing number of VWP countries. 

Finally, on March 31, 2013, the VWPO implemented a new reporting system to 

Congress, forwarding a batch of Congressional Summary Reports on a quarterly 

basis. With this new system, the VWP hopes to avoid the delays in producing mandated Summary Reports to the Committees. 

Question 2. In February, I along with Mr. McCaul and Mr. Meehan sent a letter 

to DHS on improving its financial management. We emphasized the importance of 

improving the Department’s financial systems, leveraging best practices from other 

organizations, and achieving a clean audit opinion. Even if the Department achieves 

a clean audit opinion, much of their efforts still rely on manual data calls to components for financial data. How sustainable is this approach to maintaining a clean 

opinion? Does the Department have a firm grasp of its finances? 

Answer. DHS management recognizes the need to upgrade its financial systems, 

most of which were inherited when the Department began operations in 2003. These 

legacy information technology (IT) issues have existed for more than a decade, causing the Department to rely on complex manual workarounds and compensating 

processes to support its IT environment and financial reporting. The financial IT 

issues have become even more problematic with the passage of time, as more IT systems are no longer FFMIA compliant, nor are they supported by the original vendor. 

As a result, DHS is unable to attest to a strong control environment, and must expend disproportionate human and financial resources for even basic financial statement preparation. The Department is currently unable to obtain an opinion on its 

internal controls over financial reporting, as required by the DHS Financial Accountability Act. 

While DHS financial IT systems have serious internal control deficiencies, and are 

expensive to maintain, the Department has implemented compensating manual 

processes and workarounds to produce its financial statements. Provided that the 

Department maintains the effectiveness of the manual workarounds from year to 

year, and the financial IT systems do not further deteriorate, then the Department 

should be able to maintain a clean opinion once it has been achieved. Thus, if the 

Department achieves a clean opinion in fiscal year 2013, its current processes and 

resources should allow it to maintain this opinion in the future. 

Each year, the Department has improved its financial management by addressing 

auditors’ concerns and correcting identified significant deficiencies. This improved financial management includes achieving a qualified opinion in fiscal year 2012 on 

all financial statements after years of disclaimers; fewer violations of the 

Antideficiency Act; earlier identification of needed reprogramming of funds; reducing 

the number of material weaknesses and significant deficiencies, as well as mitigating the conditions that contribute to significant deficiencies; and improving and 

stabilizing the capabilities of financial management staff. Although it cannot guarantee future performance, the Department’s commitment and tone at all levels, including that of the Secretary, have also improved measurably over the past 5 years. 

We should note, however, that a Federal financial statements audit is designed 

to provide reasonable, but not absolute assurance that the financial statements are 

fairly stated. They are designed based on the process used to audit publicly-traded 

companies, where the emphasis is on ensuring reasonably accurate reporting of revenue. A financial statement audit is not designed to identify waste or inefficiencies; 

and the auditors’ opinion does not cover any other operational or performance aspects of the agency, systems, or the supporting documents that are not part of the 

underlying financial statements. 

Question 3. You reported that challenges exist for TSA to deter and prevent 

exfiltration of sensitive information outside its network. What steps has TSA taken 

to address these challenges? 

Answer. Both recommendations No. 3 and No. 4 in our report entitled, Transportation Security Administration Has Taken Steps To Address the Insider Threat But 

Challenges Remain, were closed due to continued non-compliance from the compo-
75 

nent. There appeared to be an unwillingness of the part of the Department to meet, 

at a minimum, the basic intent of each. We became concerned that either or both 

could remain open and unresolved for a significant amount of time. 

TSA supplied no further plan of action to address either of these vulnerabilities. 

We advised TSA of the risks it would accept for non-compliance. Our decision to 

close the recommendations was based on TSA’s apparent acceptance of the risk it 

was taking by its non-compliance. This could have been pursued further through the 

resolution process, but we opted not to. 

QUESTIONS FROM CHAIRMAN JEFF DUNCAN FOR PAUL G. STERN

Question 1. Within DHS, there seem to be endless levels of management review 

regarding certain programs and less so in others. How does the private sector strike 

the appropriate balance between review and action? Will Government ever be able 

to streamline its cumbersome review process for programs? 

Answer. Response was not received at the time of publication. 

Question 2. Eliminating excess real property is another important business practice. DHS has over 50 office locations within the DC region alone. Realizing the need 

to reduce its real estate footprint, DHS embarked in 2005 on an effort to build a 

consolidated headquarters. However, the schedule for this project has slipped by 

about 6 years and will cost over $4 billion to complete. How would the private sector 

have tackled such a consolidation effort? What lessons learned could be applied to 

DHS to ensure their effort to consolidate real estate is done in the most cost-efficient manner? 

Answer. Response was not received at the time of publication. 

Question 3. As the third-largest Federal department, DHS owns a lot of vehicles, 

uses a lot of gas and electricity, ships a ton of documents—overall, has a huge 

logistical footprint. Are there lessons to learn from the private sector in the area 

of logistics that DHS should consider in attempting to eliminate wasteful spending? 

Answer. Response was not received at the time of publication. 

QUESTIONS FROM CHAIRMAN JEFF DUNCAN FOR CRAIG KILLOUGH

Question 1. Adjusting compensation, pay, and benefits for Federal employees is 

not a popular topic of conversation of bureaucrats inside the beltway. However, the 

private sector constantly evaluates the way it compensates employees and takes 

steps to eliminate overhead and management staff when it makes sense. What lessons could be learned from business practices to better structure compensation, pay, 

and benefits for Federal employees? What could also be applied to law enforcement/ 

security professionals as DHS is the largest Federal law enforcement agency? 

Answer. Chairman Duncan, thank you for the question. The treatment of pay and 

compensation is a sensitive topic, but there are lessons to be learned from the private sector. PMI’s Pulse of the ProfessionTM report and other research, including our 

talent report, shows significant differences in organizational performance that is directly dependent on how their project and program managers are recognized. 

Throughout our Pulse of the Profession report, which was submitted to the subcommittee with my testimony, you will read how high-performing organizations are 

doing everything they can to minimize risk by improving their project and program 

outcomes. Organizations that combine excellence in tactical project implementation 

with alignment to strategy complete projects successfully 90% of the time, while 

poorer performers are successful only 34% of the time. And that gap (which nets 

out to somewhere in the neighborhood of $260 million dollars saved on a billion-dollar project) delivers significant value for the organizations that do it well. 

One of the key lessons from this is that high-performing organizations provide 

consistent and continuous development for project managers to enhance organizational success and are significantly more likely than low performers to have a defined career path for project managers. An established career path will allow for an 

appropriate definition of a compensation structure. Many private-sector organizations align their career path with appropriate compensation structures supported by 

annual salary research addressing the specific career path. Furthermore, this process ties performance and achievement to responsibilities. Each step along the career 

path should be clearly outlined with performance metrics and designations for training, certifications, or other recognitions of skill and merit. A career path is an important tool for meeting the human capital challenges of the Federal workforce, particularly evaluating talent, retaining high performers, and incentivizing career 

growth through skill development and knowledge. The Pulse of the Profession report 

highlighted the importance of a career path in improving the capabilities of project 

professionals to enable excellence, as 68% of high-performing organizations have a 

career path as opposed to only 26% of low-performing organizations. Having a policy 
76 

1 Insights and Trends: Current Portfolio, Program, and Project Management Practices, PwC, 

2012. Results based on a survey of 1,524 respondents from 38 countries and within 34 industries. 

to develop competency and ensuring the use of project management standards is 

also a significant element of high-performing organizations. These reforms to the 

structure of the workforce will better align the Government to the private sector. 

Finally, for any organization, including law enforcement organizations, having 

clear standards that are compatible with the private sector or common among organizations is critically important for sharing knowledge, transparency, and oversight. 

Standards, especially risk management standards, should be uniform and aligned 

with the Department’s components so that its executives and Congress can evaluate 

risks faced by each law enforcement division of the Department and allocate resources according to a common understanding of the risks. The process is very similar to companies using metrics like earnings per share as a measure to provide investors. 

Question 2. In tightening budget times, what are some cost-effective ways to train 

program managers? What practices would you recommend DHS adopt to continue 

to improve its training program? 

Answer. Chairman Duncan, thank you for this important question. Finding resources and developing efficient training is a challenge for all organizations. PMI’s 

Pulse of the Profession shows that often Government organizations have program 

management offices (like the Program Assessment and Risk Management Office at 

DHS), yet the practice of developing program management talent may not be viewed 

as a strategic investment. Our research shows that less than 40% of Government 

organizations have a formal process for developing program manager competency. 

Training to standards, the use of mentoring, and having a job classification and career path are critical. Our research also shows standardization of practices and 

tools, especially in program and project management, and the use of certifications 

leads to a more efficient allocation of resources and a greater ability to lead and 

innovate. The Department should leverage the resources of other agencies in the 

U.S. Government; we would recommend organizations like the Defense Acquisition 

University, NASA’s Academy of Program/Project Engineering Leadership (APPEL) 

and the VA’s Acquisition Academy. Easing access for DHS personnel to these resources and aligning the program management criteria with standard practices 

could be highly cost-effective for the taxpayer—reducing duplication and waste, 

while improving access to training for the Department. 

Question 3. When measuring performance in the private sector, what are some 

good performance metrics by which to gauge success? What types of performance 

goals are transferrable from the private sector to DHS? 

Answer. Chairman Duncan, for members of the program and project management 

community, almost any program or project management metric is transferable from 

the private sector to DHS. These metrics include scope, budget, resource utilization, 

and risk. There have been a number of steps taken already by the Department, such 

as the creation of the Program Assessment and Risk Management Office (PARM), 

to better align these metrics and requirements across the Department. While these 

are important steps, however, there is one area that should be emphasized and will 

provide a significant amount of support to measure and gauge success—that is the 

use of portfolio management. Portfolio management lets executives look holistically 

across the group of projects to get the pulse of the portfolio’s return on investment 

(ROI) and strategic alignment. PMI and a separate PriceWaterhouseCoopers survey 1 found that use of portfolio management leads to increases in key performance 

indicators including quality, scope, budget (cost), schedule (on time) and business 

benefits. Additionally, PMI’s Pulse of the Profession report showed that organizations with mature portfolio management practices report an average of 76% of their 

project meet business goals as opposed to an average of 56% of organizations that 

don’t use portfolio management as often or as well. 

Implementing a strong portfolio management policy will provide metrics and 

transparency to better gauge the Department’s success. A model for the Department 

of Homeland Security could be the PortfolioStat currently being utilized by the Office of Management and Budget and several departments, including the Department 

of Health and Human Services and the Department of Commerce in IT. The Senate 

Homeland Security and Government Affairs Committee held a hearing on this subject in June 2013. 

Æ